Aphtha demand remained supported by healthy margins, while LPG is taking a breather ahead of Saudi Aramco’s announcement of November term Contract Prices, amid healthy demand. says an article published in S&P Global.
Gasoline
** November FOB Singapore 92 RON gasoline swap was notionally pegged around $96.18/b early Oct. 25 trade, up 1.27% from the previous trading session, as US supply-side disruptions supported the crude complex.
** Bullish momentum is expected to continue through this week, as market participants noted surging demand in Asia through October. Malaysia’s gasoline demand is estimated to be nearing pre-COVID-19 levels, following the resumption of inter-state travel, sources said.
** The end of monsoon and October holidays saw rocketing gasoline demand in India. Market participants said import volumes reflect robust demand, with state-owned Indian Oil Corp. and Hindustan Petroleum Corp. Ltd. seeking three spot 92 RON gasoline cargoes and 10,000 mt of 89 RON gasoline, respectively. India is also seeing some refinery maintenance, limiting supply and driving gasoline prices higher. The end of the monsoon in Myanmar also lifted gasoline demand, market participants said.
** Demand in Southeast Asia’s top gasoline buyer Indonesia towards end-October remained healthy. Market participants said October demand was at least 11 million barrels, and November would be equal, if not higher. State-run Pertamina last sought three parcels of 92 RON gasoline for November-December.
Naphtha
** The physical C+F Japan naphtha marker rose $12.875/mt from the previous Asian session to $798.50/mt mid-morning Oct. 25 on higher crude.
** Stable sentiment was reflected in naphtha swaps with brokers pegging front-month November-December Mean of Platts Japan naphtha swap spread at $11.25/mt mid-morning Oct. 25, up 75 cents/mt from the Oct. 22 Asian close, Platts data showed.
** Asia’s naphtha complex is set to conclude H1 December delivery buying this week, as the trading cycle rolls to H2 December delivery Nov. 1. However, extended demand support is expected from regional steam crackers on positive olefin margins, sources said.
** Market strength was reflected in CFR Japan naphtha physical crack against ICE Brent crude futures, which touched seven-year highs of $149.85/mt at Asia’s Oct. 22 close, Platts data showed. Leveraging Brent’s upswing, the physical crack rose $4.875/mt day on day and $2.15/mt week on week at the Oct. 22 close.
** Naphtha demand as a steam cracker feedstock is expected to hold firm this week, as the key CFR Northeast Asia ethylene and C+F Japan naphtha spread widened $33.375/mt week on week to $414.375/mt Oct. 22, above the breakeven $300-$350/mt for non-integrated producers.
LPG
** Front-month November propane contract swap was notionally indicated at $842/mt Oct. 25, down from $846/mt Oct. 22. This is $42/mt above the October term contract prices, ahead of Saudi Aramco’s announcement of November term CPs due by Oct. 28. November CP butane swap was indicated at $20/mt below propane.
** November-December CP propane swap was indicated at a contango of $2/mt Oct. 25, widening from $1/mt the previous session, while December-January was indicated at a backwardation of $9/mt, narrowing from $10/mt the previous session.
** Though November term CPs may be on track for the sixth-straight monthly increase, the level has been narrowing amid ample Middle East butane supply, with Aramco and Saudi ADNOC LNG each heard selling a spot cargo of mixed LPG.
As propane demand is expected to be healthy in North Asia, with Chinese PDH plants having returned from maintenance and concerns over an early winter amid low stocks in Japan, any excess butane will keep butane at deep discounts to propane.
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Source: S&pGlobal
