News 2- NWE naphtha cargoes fall to 3 month low vs swaps amid low prompt demand (27-6-2016)

CIF Northwest European naphtha cargoes dropped to a three-month low vs the front-month swap in the middle of the previous week on a lack of prompt buying interest and lengthening supply, as per Platts. CIF naphtha cargoes were assessed at US$422/mt, down US$0.50/mt on the day, and assessed at a US$1/mt discount to the July CIF NWE naphtha swap, down from a US$1.50/mt premium the previous day. The naphtha cargo has not been assessed at a discount to the front-month swap since March 22.

Physical premiums for open spec naphtha have been under pressure recently amid prompt length in Light Virgin Naphtha, healthy open spec supply in July and a closed arbitrage to Asia.”The market is a lot longer…going into July there are plenty of offers including for open spec, demand for blending is not good and the east/west spread is narrow,” a market participant has been reported by Platts. According to another market participant, there is no oversupply for open spec naphtha but there is length in the Light Virgin Naphtha Market.

“LVN is the longer part of the barrel, petchems are buying but nothing spectacular and for blending grades we could see more buying interest as the mogas/naphtha spread has widened and reforming margins have picked up,” he said. A third market participant saw little demand for open spec in Europe before the middle of next month. “We see demand from mid-July onwards, I think most petchems are covered until July 10,” he said.