Confusion as naphtha soars

03 June 1995 00:00  [Source: ACN]

NAPHTHA markets were confused last week as quotes soared in Singapore to $175/tonne cfr SEA for mid-March to early April. This cuts sharply the usual differential with NEA where $182-$183/tonne cif Japan is being talked by traders for first and second-half May delivery. Interpretations vary on the detailed mechanisms behind the sharp rise in Singapore levels, but the major influence seems to have been the switch in Platts' quotation method because of the emergence of firm buyers in the market. It is widely agreed the levels are overheated. Some traders are understood to be understood to be lobbying Platts to alter its position on the quote, but are so far unsuccessful. In NEA and SEA, business has been slack with end users still scarce and no recent deals. Reports that deals have been reached over $180/tonne cif Japan were unconfirmed. The Koreans are not expected to start buying again until end-March/early April for May delivery.

Ethylene prices continue to weaken with spot ideas around $350/tonne fob Korea. A prompt cargo of 3000 tonne of Korean product has been sold to Indonesia at $450-$460/tonne cfr Indonesia. Sources said it will be shipped on a time-charter vessel, Elbe Gas, at a rate just over $100/tonne. Samsung has concluded its purchases of ethylene at around $430/tonne cfr Daesan (ACN 6 March p28).

Bulk chemical spot prices - US$/tonne
	Asia/Pacific spot		US/Euro contracts
	NE Asia1	SE Asia2	US3	NWE4
Naphtha	171.5-172 cif Jpn6	160-1616	N/A	N/A
Ethylene	4006	450-460 cfr Indonesia	0.28-0.325 /lb FD Jan	930
Propylene5	640-650 cfr Tai	710 cfr Thai	0.2175/lb Jan	835
Butadiene	430-440 cfr China	N/A	0.25/lb	687-725
Benzene	370	340-3606	1.20/gal	540
Toluene	285-287	300-3056	0.96-0.97/gal	425 ex works
Xylenes	380-390 cfr China	410-4306 cfr Sing	1.25/gal	N/A
Styrene	1270	10306	0.43-0.46/lb	1590-1635
Paraxylene	1145	N/A	0.295/lb FD Q1	1040
Orthoxylene	960 fob Taiwan	1000	0.32/lb	1240
Methanol	460-470 cif Japan	470 cfr Sing	1.30-1.31/gal barge Feb	815 fob
MTBE	290 cfr Tai7	325 fob Sing	0.86-0.90/gal spot8	2.0x
Ammonia	245.50 cfr Tai	180-184 fob Indonesia	-	-
1 Prices are fob Korea unless indicated; 2 Prices are cfr SEA unless indicated; 3 US prices are February contract levels on an fob basis unless otherwise indicated, courtesy of ICIS- LOR; 4 European FD Q1 contract price in DM/tonne, courtesy of ECN; 5 Propylene is polymer grade; 6 No known recent business; 7 For first half April delivery; 8 For delivery within three weeks of publication. Prices contained in this report are obtained through consultation with producers, consumers and merchants in the regions indicated. They are intended as a guide to price levels of recent business and reflect medium to large tonnage sales. Spot prices are quoted as indi- cated: cfr - cost and freight; fob - free on board; cif- cost, insurance and freight; FD - free delivered. Spot prices in this issue are based on information available mid-week prior to the date of issue. Dollar prices are based on rates of exchange prevailing at this time.

Propylene prices are said to be steady but business is slow as some Korean producers are out due the plant turnarounds. A lack of vessel availability is also said to be constraining business. There have been reports of traders enquiring for 2000-3000 tonne parcels for May/June delivery. Talks for Q2 contracts are near conclusion with prices expected to be around $600/tonne cfr Taiwan.

Butadiene rates have slipped with reports of cargoes from Korea at $430-$440/tonne cfr China for March delivery, and one producer confirmed a 1500 tonne March delivery at $450/tonne cif China. April deliveries remain unresolved with Chinese offers reported in the $440-$450/tonne cif China range, but Korea selling ideas between $450 and $460/tonne. Samsung confirmed a 1900 tonne crude C4 shipment to the US, loading last week, but the price was not disclosed. It is also shipping a 5000 tonne contract cargo in April. Taiwan is still reported to be delaying contract shipments.

Benzene prices in Asia remain weak following the softening seen in US spot prices. There have been unconfirmed reports that two 4000 tonne parcels have been sold to India at $395-$400/tonne cfr India for March delivery. There have been enquiries from China and a small parcel is understood to have been sold at $388-$390/tonne cfr China for prompt delivery. Product is being offered from the US at $375-$380/tonne cfr Asia for May delivery. US spot prices are said to have fallen to $1.02/gal fob.

Toluene prices appear to have fallen further with the Korean export price put at $285/tonne fob. There have been reports of 2000 tonne sold to mainland China at $286-$287/tonne fob Korea and 3500 tonne also to China at $285/tonne fob for March delivery. Chinese buyers are said to be holding out for $300/tonne cfr but sellers are only offering $320/tonne cfr China. Two Korean traders have bought 1500 tonne each at $290/tonne fob Korea for first and second-half March lifting. US spot prices have fallen to 74cent/gal fob but the high freight rates, up to $85/tonne for a 5000 tonne parcel, make it unattractive to ship to the Far East.

Prices of mixed xylenes are also weak. A 2000 tonne parcel of solvent grade xylenes has been sold at $390/tonne cfr China for March delivery but buyers are understood to be looking at prices of $370-$380/tonne cfr China. In SEA, material has been offered at $395/tonne cfr but has found no takers.

Confusion and speculation surrounds the styrene monomer market. However, a spot cargo of 2000 tonne has been sold at $1270/tonne fob Korea to a Korean trader for March lifting. Japanese producers are starting talks for April delivery with price ideas around $1150-$1200/tonne cfr Taiwan, compared to the March price of $1050/tonne cfr Taiwan. Price ideas between Chinese buyers and sellers for April cover a wide range of between $1200-$1270/tonne cfr China.

Very little spot paraxylene material is available as Korean producers are holding stocks to meet their long-term commitments during the forthcoming plant turnarounds. However, one Korean producer which has 3000 tonne available for March lifting has rejected offers of $1600/tonne fob Korea. In the US, one producer is reported to have nominated a 7cent/lb increase for Q2 contracts which would lift delivered prices to 36.5cent/lb if accepted.

Prices of orthoxylene are steady with a 1000 tonne cargo sold at $960/tonne fob Korea for March lifting. US producers are said to have nominated a 2cent/lb increase for March contract prices which would lift prices to 34cent/lb delivered.

Methanol prices have fallen rapidly with little interest, making it difficult to identify exact levels. There have been no takers for product on offer from China at $410/tonne fob China with buyers said to be looking below the $400/tonne cfr level. March contract deliveries to Korea and Taiwan have been set at $450-$460/tonne cfr; April's contract prices are expected to be much lower.

Asian prices of MTBE have weakened following the fall in the US where there is increased uncertainty as more states are opting out of the reformulated gasoline programme. No spot business has been reported in SEA although there have been enquiries for 1000-2000 tonne quantities for Indonesia. A tender for the supply of 1500 tonne of MTBE to the Bangchak refinery in Thailand around late March/early April closed on 2 March. The CPC tender for 3500 tonne for first-half April delivery is understood to have been awarded at $290/tonne cfr Taiwan, but some market sources have questioned this very low price.

The ammonia market continues to be tight with spot prices moving up to $185-$190/tonne fob Yuzhnyy. Taiwan's CPDC buying tender for 12 000-15 000 tonne of ammonia for May delivery will close on 7 March. CSBP in Australia is considering a buying tender for around 20 000-25 000 tonne for May/June delivery although details have not been finalised.

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