24 March 2003 00:00 [Source: ACN]
Naphtha: Prices plummeted, on the back of softening crude, after US President George Bush issued a war ultimatum to Saddam Hussein. Also sending crude down was the assurance of release of emergency supply from US federal oil reserves if required.
The MoPJ fell by US$91.5/tonne to US$293.5/tonne cfr Japan last Wednesday.
Premiums also fell to US$6/tonne over the MoPJ for first-half April to first-half May cargoes. and to US$8.5/tonne for first-half May to first-half June after the war started last Thursday, down from US$13/tonne on Wednesday.
Cracker operators were relieved at the softening of naphtha prices. But traders said the relief could be shortlived as prices could rebound after the war comes to an end.
Ethylene: Prices continued to fall, as naphtha costs declined and price resistance from PE and monoethylene glycol (MEG) customers mounted. And this, despite unscheduled turnarounds at Chinese Petroleum Corp's No4 and No5 crackers in Kaohsiung, Taiwan, which exacerbated the tightness in supply (see p5).
In SEA, the situation was slightly better due to large availability of spot material from the ExxonMobil cracker in Singapore. The material was available as the company's PE plant at the same complex had not yet restarted at press time. The plant was shut down on 9 March (ACN 17 Mar, p6).
One deal was concluded at US$620/tonne cfr NEA early last week, US$20/tonne lower than previous business.
But buying ideas were heading below US$600/tonne cfr NEA by the middle of last week, as concerns mounted over the duration of the war in Iraq.
An SEA customer bought a cargo at US$640-650/tonne cfr SEA. But this was said to be a special deal, the reasons for which were not clear. Offers from other producers were said to be much lower.
Propylene: Supply was extremely tight, despite efforts by producers to increase the propylene yield of their crackers (see p35).
There was an unconfirmed report of a deep-sea cargo having been sold for US$650/ tonne cfr NEA. But buying ideas last week were as low as US$630/tonne cfr NEA.
There were also rumours of another deal done at US$620-630/tonne fob Korea.
Offers of US$690/tonne cfr SEA were facing buyer resistance, despite strong demand.
South Korean traders said they were waiting for the outcome of contract price negotiations for Q2 before concluding spot deals.
Butadiene: Hardly any spot material was on offer, supply being extremely tight.
A deal at US$800/tonne cfr NEA, US$30- 50/tonne higher than a previous deal, was confirmed last week.
Haldia Petrochemicals sold two 2000-tonne cargoes for March and April delivery at US$790-800/tonne cfr NEA/SEA each, a trader said.
Methanol: Markets continued to be extremely tight. The main reason was the 60% cutback in production by Methanex's New Zealand plant. No deals were reported done due to the non-availability of spot material.
Methanex announced an Asian contract price of US$270/tonne cfr Asia for March, US$18/tonne higher than its February contract price (see p34).
MTBE: Markets remained tight. But no business was reported last week.
Ammonia: Several deals were reported done as prices rose on tight supply. China Petroleum Development Co secured a 22000 tonne April consignment at US$190-195/tonne cfr Taiwan, US$20/tonne higher than a previous lot.
Even lower-cost Russian material was sold at US$210/tonne fob Yuzhnyy to tight US markets, where high natural-gas prices and plant shutdowns had sent prices soaring.
|Asia/Pacific spot||US/Euro contracts|
|NE Asia1||S Asia and SE Asia2||US3||NWE4|
|293.5 cfr Japan (MoPJ)||-||na||na|
|620 cfr NEA||640-650||656 Feb||575 Q1|
|700 cfr NEA6||6906||528 Feb||520 Q1|
|800 cfr NEA||790-800 cfr SEA||683 Mar||557 Q1|
|290-300 cfr NEA6||280-290 cfr India6||263 Feb||228 Q1|
|330 cfr Taiwan6||375 fob SEA6||na||na|
|Ammonia||190-195 cfr Taiwan||169 cfr India6||225 cfr US Gulf 1st half Mar||na|
1 prices are fob Korea unless otherwise
2 prices are cfr SEA unless otherwise indicated
3 US prices are Oct contract levels in US$/tonne on an fob basis, courtesy of ECN, unless otherwise stated
4 European free-delivered Q4 contract prices in Euro/tonne unless otherwise stated
5 polymer grade
6 no recent confirmed deals
MoPJ= Mean of Platt's Japan
na = not available
Prices contained in this report are obtained by the ACN team through consultation with producers, consumers and merchants in the regions indicated. They are 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 are based on information available mid-week prior to the date of issue. Dollar prices are based on prevailing rates of exchange.
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