Naphtha comeback for S Korea

26 June 1995 00:00  [Source: ACN]

THE naphtha market has become active again with Korean buyers re-entering for second half July delivery. Honam, Lucky and Daelim purchased several cargoes last week at an average of MoPJ minus US$0.51/tonne.

Daelim's naphtha cracker came back from maintenance on 19 June and consequently four cargoes were purchased at MoPJ minus 50 cents for prompt delivery. Hyundai bought two cargoes for second half July on a fixed price basis below US$184/tonne cfr Korea. South Korea will be looking for eight August cargoes, believed to be 25 000 tonne each.

Ethylene is reported quiet with few enquiries for spot business. One 2000 tonne parcel of ethylene was confirmed at US$445/tonne cfr Indonesia from AG for July arrival.

Buyer ideas for Korean material are slightly below US$430/tonne cfr Taiwan for July delivery. Korean supplier ideas are close to this at just above US$430/tonne cfr Taiwan. Thailand's NPC began its 80 day shutdown on 17 June and is said to be covered.

Propylene markets are dead, although some buying interest is reported at US$530/tonne cfr SEA from either AG or the Mediterranean for July delivery, but no business is confirmed at present. BP's Exorl product is reportedly fetching around US$590-595/tonne cfr Thailand for term buyers for end June delivery. Lucky Petrochemical is preparing for its 20-day shutdown starting 20 October and is storing all non-contracted propylene production.

Other South Korean producers are expected to have material available for export again in July. However, with inventories low following the cracker shutdowns, they are likely to wait for some improvement in price levels, one trader said. The prevailing price in NEA is currently put at US$525-$550/tonne fob South Korea,: although this is strictly theoretical and no recent business has been reported.

Bulk chemical spot prices - US$/tonne
	Asia/Pacific spot		US/Euro contracts
	NE Asia1	SE Asia2	US3	NWE4
Naphtha	183-1847 cfr Korea	171.456 fob Sing	N/A	N/A
Ethylene	4656 cfr Taiwan	445 cfr Indonesia	0.29-0.335/lb FD April	930
Propylene5	590-595 cfr China	580	0.2475/lb April	835
Butadiene	400 cfr China8	N/A	0.23/lb June	665
Benzene	3856	3706	1.05/gal June	470
Toluene	3097 cfr Taiwan	345-3556	0.92/gal May	380 fob
Xylenes	419 cfr Taiwan6	3806	1.25/gal June	N/A
Styrene	1230 fob Korea6	-	0.51-0.53/lb	1875-1920
Paraxylene	1810 cfr Korea	N/A	0.36/lb FD Q2	1167
Orthoxylene	954 fob Taiwan6	750 cfr India	0.38/lb	1350
Methanol	200 cfr China	200 cfr Sing	-	270 fob
MTBE	280-2856 cfr Taiwan	2858 6 fob Sing	-	1.35
Ammonia	273.95-274.50 cfr Korea	241 cfr wc India	-	N/A
1 Prices are fob Korea unless indicated; 2 Prices are cfr SEA unless indicated; 3 US prices are March contract levels on an fob basis unless otherwise indicated; 4 European FD Q2 contract price in DM/tonne, courtesy of ECN; 5 Propylene is polymer grade; 6 No known recent business; 7 For second half of July delivery. 8For July delivery. 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 indicated: 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.

Butadiene selling ideas to China are now well above US$400/tonne cfr, although little business has been completed. Most recent purchases by Chinese buyers are reported at US$390/tonne cfr and US$400/tonne cfr for July, the latter for 1000-1500 tonne. With most material now committed for July, South Korean sellers are content to await the outcome of July US contract negotiations before entering serious talks for August shipment.

Exxon has nominated 25 cent/lb for July contracts, but has not yet been followed. Some sources expect US levels to rise to 24 cent/lb, after the rollover at 23 cent/lb in June. One South Korean trader reports he can sell at US$380-$390/tonne fob Korea to the US and is looking for US$430/tonne cfr China for August deliveries. Others report talks with US buyers at around US$340-$365/tonne fob Korea for July shipment/August delivery

Benzene markets are quiet. Many sources claim it is due to lack of Chinese interest owing to the restricted import situation, although one source would refute this strongly. China was rumoured to have purchased around 2000 tonne from Korea at US$320$350 cfr China mainport, which was later cancelled, although this has yet to be confirmed. The only interest in benzene at the moment is in :India, where prices are dropping sharply (ACN 26 June p24).

Toluene interest appears to be focused on Japan, with purchasing indicated for gasoline blending remaining relatively firm. Liftings for first half July are already reported to be between 6-10 000 tonne. Prices have been reported at US$310-$320 fob Korea.

Taiwan is also reported to be buying toluene for gasoline blending from the US cargoes reported last week. Prices are reported to be low, but sources have not been able to pinpoint exact levels.

Xylenes markets are calm with no buying interest. Producers prices still appear to be above US$400 cfr China/Taiwan and refineries are thought to be extracting xylenes at a reduced rate, leaving product in balance.

The styrene market shows no sign of bullishness. US$1200/tonne cfr to both NEA and SEA is now being discussed. A 5000 tonne US cargo is said to have been swapped between the US and Taiwan at around US$1200/tonne cfr. All Taiwanese buyers are now quoting US$1200/tonne cfr or below.

A Shanghai end-user is reportedly bidding for 2000 tonne at US$1190/tonne cfr for June arrival. The styrene market is saturated and continues to depend on how soon China will return to the market. South Korean majors are still officially reluctant to sell at below US$1200/tonne fob.

Paraxylene buyers in NEA continue to hold out for spot levels of US$1700/tonne cfr or below, countered by sellers' offers at US$1850/tonne cfr minimum. Q3 contract negotiations are ongoing.

Samsung Petrochemical is reportedly in the market for extra quantities. Honam confirms the start up of its new PX plant in August. India is expected to return to the market.

CPC does not seem to want to re-tender for its July orthoxylene portion. Sellers are hoping that the spot market has hit rock bottom, but latest rumours of offers ex-Europe at US$650/tonne cfr Far East appear to indicate otherwise. Product was reported offered to the South Korean market at US$690/tonne cfr for August arrival.

Methanol buyer ideas are US$170/tonne cfr NEA or below for 5000 tonne parcels for end July/beginning August delivery, whereas SEA seller ideas are US$190-$200/tonne cfr NEA. Chinese buying ideas are reportedly below US$190/tonne cfr for 5000 tonne parcels for July arrival.

Little new activity is reported for the MTBE market although CPC is looking for product on both spot and term bases for July and August delivery. CPC is using a pricing formula of the mean of European and US spot prices plus US$2.50/tonne.

Indonesia is reported to be enquiring for a 750 tonne parcel of MTBE for second half July delivery, but price ideas are unknown. Producer ideas are said to be US$290-$300/tonne cfr SEA.

CPDC, Taiwan has announced a new ammonia tender to close 27 June for 1215 000 tonne for delivery 17-30 August. Samsung Fine Chemicals closed its tender on 21 June for 20-35 000 tonne ammonia for delivery 29 August-2 September, with bids opened on 22 June as ACN went to press.

Sanapik will load 15 000 tonne aboard the Hesiod on 2 July for TFC, Taiwan, concluded at US$268-$269 cfr Kaohsiung. GPIC, Bahrain will ship 14 000 tonne in July concluded to Transfert at US$241 cfr west coast India. It is unclear if this tonnage has been finalised to Indian buyers (ACN 26 June p24).

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