20 February 2008 04:47 [Source: ICIS news]
SINGAPORE (ICIS news)--Asia naphtha and aromatics surged around $20/tonne on Wednesday after crude oil topped $100/bbl (€68/bbl) overnight but the rise in energy values failed to stem falls in olefins caused by excess supply, producers and traders said.
Crude oil soared briefly to $100.10/bbl on Tuesday in the
Fresh investors’ capital was also pumped into commodities, boosting prices. Trading cooled on Wednesday in Asia as
Naphtha prices opened $19/tonne higher on Wednesday. First half April price indications were pegged at $908.00-911.00/tonne CFR (cost and freight)
However, prices could ease in March when more arbitrage cargoes arrive, traders said.
Buy-sell indications for benzene rose $25-40/tonne to $1,100-1,130/tonne FOB (free on board)
A benzene deal was heard concluded at $1,110/tonne FOB
Downstream styrene monomer (SM) also gained ground with selling indications up $20/tonne at $1,420/tonne FOB
However, high crude prices failed to affect toluene prices as bids were elusive and offers were steady at $980/tonne FOB
It also could not prop up falling olefins prices as excess propylene and butadiene (BD) supply swept the market.
Propylene prices fell last week and may slip further as traders slashed offers to attract buyers.
Spot BD was off its record high of $1,900/tonne CFR northeast Asia in early February to around $1,800/tonne CFR for March loadings as buyers retreated from the market amid the arrival of about 40,000 tonnes of deep-sea cargoes from Europe and the
“It will be difficult to stop the BD price falling even if crude was to be sustained around the $100/bb level,” he said.
Polyolefins traders in
“It is still unclear if the crude price will have any impact on the polyolefins market because it has been volatile and it may fall back down again,” a Chinese trader said in Mandarin.
However, some regional producers said polyolefins prices could increase or remain stable if crude prices continued to strengthen.
“With naphtha selling above $800/tonne CFR (cost and freight)
The impact of high crude on the petrochemical market would depend on how long oil stays at $100/bbl and on naphtha supply, Samuel Lee, a JP Morgan chemical analyst, said.
“While oil prices were rising in October last year, naphtha did not move in line because of the availability of exports from
When that volume dried up, naphtha started rising, he added.
“Higher oil prices are also a good excuse for petrochemical producers to raise prices and perhaps capture a little more margin,” Lee said.
Desmond Chia, Clive Ong, Kew Jia Hui, Helen Yan and Chow Bee Lin contributed to this article
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