Asia naphtha weak on lacklustre NE Asia demand

14 April 2008 10:31  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian naphtha premiums continued to weaken due to lacklustre demand from northeast Asian end-users, industry sources said Monday.

The latest deal for an open spec naphtha cargo for May delivery was done at flat to Japan quotes CFR (cost and freight) Korea by LG Chemical.

The last deal in early April for a similar cargo was reported done at a premium of $1.50-1.75/tonne to Japan quotes CFR Korea for May delivery.

Demand for naphtha as a feedstock weakened as high costs and poor margins from downstream derivatives kept South Korean cracker operators at sidelined.

Korean end-users had mostly covered their May requirements and the few that have not were deferring purchases till prices soften, market sources said.

Some NE Asian end-users had been trying to increase their usage of liquefied petroleum gas (LPG) as a feedstock instead of naphtha.

Demand for naphtha from end-users in Europe was also seen as weak. The situation was further exacerbated by lacklustre demand for motor gasoline (mogas) in Europe and the US, sources added.

By: Desmond Chia
+65 6780 4359

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