21-06-2018

S Korean demand for heavy naphtha keeps premiums near 2018 high -traders

South Korea’s appetite for heavy full-range naphtha as an alternative feedstock to condensates, supported by firm demand from petrochemical firms SK Energy and Hanwha Total, has kept premiums near this year’s highs, traders said.

SK Energy on Tuesday bought some 50,000 tonnes of the fuel at premiums around $17 to $18 a tonne to Japan quotes on a cost-and-freight (C&F) range, traders not related to the company said.

Although the latest premium that SK Energy paid was below last week’s $19.25, it was still higher compared with the start of the year when premiums on heavy full-range naphtha were at $10 or below.

SK Energy, like many other buyers, do not typically comment on its deals.

SK Energy’s purchase came a day after Hanwha Total had locked in slightly less than 150,000 tonnes of the same grade at almost similar premiums.

The availability of condensates in South Korea was disrupted after The National Iranian Oil Company Iran reduced supply following the start-up of Iran’s new condensate splitter.

It was unclear if the renewed sanctions against Iran by the United States would have a deeper impact but South Korea is attempting to seek an exemption.

Iranian condensates by far have one of the highest naphtha yield compared to other grades, said a trader who tracks both naphtha and condensates.

Condensate is a light oil sought for its large yield of fuels such as naphtha and gasoline after processing. Naphtha is used as fuel in petrochemical facilities.

Source: Reuters

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