NE Asian heavy naphtha buyers turn to condensate

11 April 2008 07:04  [Source: ICIS news]

SINGAPORE (ICIS news)-- Several heavy naphtha end-users in northeast Asia are turning to condensate instead of heavy naphtha as a feedstock due to poor margins from the aromatics market, industry sources said on Friday.

However, sourcing high quality condensate to substitute heavy naphtha was an uphill task as condensate supplies remained limited, a buyer said. “We should be glad if we can able to get 30,000 tonnes to load onto a medium range (MR) sized vessel”.

“Due to the difficulty of sourcing good condensates, we are able to substitute only half of requirements. Of course, we will like to increase our purchases but we can’t,” another end-user said.

Since prices of condensates are usually pegged to either naphtha or crude formula prices, they could vary widely. In general, condensate could be $5/tonne lower than heavy naphtha.

Heavy naphtha is pegged at a premium to Japan quotes CFR (cost and freight) Japan, with the last transacted cargo done at a premium of around $5-6/tonne to Japan quotes CFR Korea for delivery over second half of April to May.

Major buyers come from mainly China, South Korea, Japan and Taiwan and they normally used grades of Kangan and Bontan that come from Iran and Indonesia respectively.

Condensates are usually sourced from the Middle East, southeast Asia or Australia and suppliers include Qatar’s Tasweeq, Indonesia’s BPMIGAS, Vietnam’s Petechim and Malaysia’s Petronas,

On Thursday, naphtha prices hit a record high of $931/tonne CFR Japan, adding further pressure on end-users to search for alternative feedstocks.

By: Desmond Chia
+65 6780 4359

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