On June 8, the Argus Far East Index (FEI) propane swap reached a $11/mt discount to Mean of Platts Japan (MOP J) naphtha swap, which was the first discount since negative-|10/mt on March 26. On the same day, the CFR Northeast Asia ethylene/CFR Japan physical naphtha spread was $338.875/mt, which is below the breakeven spread for non-integrated producers ($350/mt) but above the breakeven point for integrated producers ($250/mt). Meanwhile, in the physical markets, CFR North Asia propane was at a $24/tm discount to CFR Japan naphtha. In previous months, arbitrage cargoes of naphtha from the West entered the region as demand for LPG in India and Indonesia surged from March to April. As a result, propane reached a premium as high as $128.5/mt to naphtha on April 17. Naphtha prices have firmed in recent weeks because of tighter availability caused by refinery run cuts and less cargoes from India, the Middle East, and the West with benchmark C+F Japan naphtha cargo reaching a three-month high of $19.125/mt.
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