(ICIS) -- Asia naphtha prices are expected to reach a three-year high, as robust global crude futures and reduced deep-sea supply from the West will result in a further upside to price levels, traders said on Thursday.
The first-half June naphtha contract rose to USD 1.099-1.102/tonne (EUR 747-749/tonne) CFR (cost & freight) Japan at 12:00 hours Singapore time (04:00 GMT) on Thursday, up USD 11.50-12.50/tonne from the settlement on Wednesday, according to ICIS data.
The last time prices surpassed the USD 1.100/tonne CFR Japan mark was on 18 July 2008, when naphtha hit USD 1.136-1.138/tonne CFR Japan, ICIS data showed.
The backwardation between first half June and first half July contracts has widened to USD 13.50/tonne, the steepest since March as the naphtha market is facing a structural shortfall.
Naphtha cargoes from northwest Europe and the Mediterranean are estimated to be 250 KT for May arrivals in Asia, down sharply from the regular monthly arbitrage imports of around 300 -500 KT, traders said.