Asia naphtha slides on slowing petchem demand

05 March 2008 10:42  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian naphtha was falling faster than crude oil on slowing demand from petrochemical and motor gasoline (mogas) producers, industry sources said on Wednesday.

Open spec naphtha for second-half April delivery was assessed at $879-880/tonne CFR (cost and freight) Japan, down 3.35% over Tuesday’s close. Brent crude was down 2.73% to around $98/bbl.

Sources attributed the weakness of the naphtha market to slowing demand from Asian end-users hit by crunching petrochemical margins.

In fact, some Asian end-users such as South Korea’s SK Energy, Indonesia’s Chandra Asri and Singapore’s PCS, have reduced operating rates at their naphtha crackers.

End-users in European were also contemplating reducing rates, they added.

Spot ethylene prices fell for the third week in a row to $1,125/tonne CFR Indonesia last week due to an influx of Middle East supply and poor demand.

Northeast Asian ethylene prices were also under pressure at $1,240-1,250/tonne CFR for end March/early April deliveries.

At the same time, demand for mogas blending had reportedly slumped in Europe and Japan.

Steve Tan contributed to this story

By: Desmond Chia
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