10 July 2007 05:39 [Source: ICIS news]
By Nurul Darni
“Having an access to low-cost feedstocks, such as butane, will give some Asian petrochemical companies considerable advantage over others which are dependant on expensive oil-based feedstocks such as naphtha,” Jim Weinrauch, a consultant with Naphtha Information Services, said.
Rising feedstock costs has already driven several petrochemical companies in ?xml:namespace>
Open spec naphtha prices in
“Purely from an economics point of view, butane has more price advantage over naphtha and this will discourage some companies from relying too heavily on naphtha as (naphtha) prices have also been rising steadily,” a trader with
The company had started using around 15% of its feedstock portion to butane from May, he added.
Asia’s open-spec naphtha prices had risen to over $700/tonne CFR (cost and freight)
Apart from LG Petrochemical, other
Normal butane or N-butane also is highly valued as a petrochemical feedstock as it yields more ethylene in a steam cracker.
“We’ve raised our butane feedstock to slightly over 10% this year, from 5-7% last year. I think this trend will continue with other Japanese petrochemical companies as well this year, if naphtha prices continue to inch up,” a trading manager at Idemitsu said.
Despite an increasing appetite towards non-naphtha feedstocks this year, it would not displace naphtha as the predominant feedstock in
“These non-naphtha feed portions are still relatively small. It would not change naphtha’s supply-demand balance in a huge way,” a trader at South Korean oil major, SK Corp said.
Naphtha still accounts for 90-95% of
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