SINGAPORE- Asia's naphtha intermonth spread returned to backwardation for the first time in about 3-1/2 weeks on Monday, supported by recent demand and stronger gasoline margins.
- Front-month first-half October open-specification naphtha price was $1.75 a tonne higher than the following month, reflecting stronger fundamentals.
- Backwardation refers to front-month prices being higher than the following months.
- Asia's gasoline margin recovered to a two-session high of $2.18 a barrel after a dip on Friday.
- Supplies of petrol were seen sharply lower following run cuts by some refiners in Asia.
- Asian gasoline exports for August were seen at 3.8 million to 4.3 million tonnes, down from July's volume of about 4.7 million tonnes, data from Refinitiv Oil Research showed.
- As for naphtha, South Korea's LG Chem emerged to buy naphtha for first-half October delivery but it was unclear if the petrochemical maker awarded the tender.
- LG Chem had on Aug. 24 paid a discount of about $1 a tonne for naphtha also scheduled for first-half October delivery, similar to the price YNCC and Lotte Chem forked out on Aug. 25 and Aug. 21 respectively.
- Hanwha and Formosa had also locked in October cargoes last week.
* CASH DEALS: Three gasoline deals and two more on naphtha.
* OTHER NEWS: China's Sinopec expects domestic refined fuel consumption to swing back to positive growth in the second half of this year.
- With China's economic recovery taking hold, end-user demand for gasoline, diesel and kerosene should rise 1% in the second half from a year earlier, after a 13% fall in the first half, a company vice president said at a briefing.
(Reporting by Seng Li Peng; Editing by Ramakrishnan M.) ((lipeng.seng@thomsonreuters.com ; +65 6870 3086; Reuters Messaging: lipeng.seng.thomsonreuters.com@reuters.net))
