Register with us today

and in less than 60 seconds continue your access to: Latest news headlines Analytical topics and features Commodities videos, podcast & blogs Sample market prices & data Special reports Subscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.

  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

IF you are a Platts Market Center subscriber, to reset your password go to the�Platts Market Center to reset your password.

In this list

Naphtha shipping reports point to opening arbitrage from US to Far East


How the US-China trade war is impacting Asian flat steel markets


Platts Dirty Tankerwire

Oil | Refined Products | Fuel Oil | Shipping | Dry Freight | Marine Fuels | Tankers

Mediterranean Bunker Fuel Conference, 7th Annual


International Seaways to equip up to 10 VLCCs with scrubbers ahead of IMO 2020

Naphtha shipping reports point to opening arbitrage from US to Far East

Fixtures reports listed three naphtha cargoes expected to leave the US Gulf Coast for Asia by mid-March, indicating more interest in the Far East arbitrage, market sources said this week.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Vitol fixed the Two Million Ways, a Long Range 1 vessel, for the voyage at $1.65 million lump sum to load March 3.

Medium Range ships Maersk Timaru and the Horizon Theano were put on subjects at $1.3 million lump sum each with mid-March laycans.

Market sources in Europe indicated earlier this week that the naphtha market there has become harder to work given that olefin producers in Asia were increasingly looking for heavier grades readily available from the US.

"The naphtha arbitrage seems to be open for those that want to head that way," a shipping source said Wednesday. "There's been some inquiry on that front."

Shipowners opt to take the long voyage across the Pacific only when time-charter earnings conditions are undoubtedly high, as finding return cargoes in Eastern Asia to go to the US Gulf Coast is challenging, sources said.


Other market participants were unconvinced that the attractive arbitrage would remain in place for a sustained period of time.

"The arbitrage is more marginal after today's gasoline stocks went down per EIA numbers," a second source said.

Naphtha, used as a gasoline blendstock and as feedstock for a refinery?s catalytic reformer, is sensitive to moves in gasoline value.

An Energy Information Administration report Wednesday said US gasoline stocks fell 788,000 barrels to 251.03 million barrels, paced by a drop in East Coast inventory. Gulf Coast gasoline stocks, however, rose 443,000 barrels to a 13-month high 85.71 million barrels, the data showed. The Gulf is the source of nearly all US naphtha barrels shipped to Asia.

Stocks in the USGC this year are running about 6 million barrels higher than they were at the same time in 2017.

Lower gasoline differentials were seen after the US stocks report. Benchmark 87-unleaded on the Colonial Pipeline at Pasadena, Texas, fell 3.5 cents to NYMEX April RBOB futures minus 21 cents/gal.


US naphtha is mostly used for reformer feed, while the product at higher sulfur is directed into petrochemicals in South Korea and Japan. The need for higher paraffinic content is much more pronounced in Asia.

The drastically different specifications for naphtha in Asia and on the Gulf Coast make calculation arbitrage difficult, but there are other ways to compare value roughly.

Japan naphtha cargoes were assessed at $565.00/mt Wednesday. US naphtha at 35% naphthenes and aromatics -- well short of reformer grade and reflecting product out of Eagle Ford and emerging from a splitter -- traded Wednesday at $519.25/mt.

With the US-Japan freight estimated at $26.67/mt, that leaves the US product -- admittedly at a far different specification -- still $19.08/mt short of the Japan value.

--Camille Bergsrud,
--Jeffrey Bair,
--Edited by Richard Rubin,