LG Chem to replace naphtha feedstock with LPG

14 April 2008 11:16  [Source: ICIS news]

SINGAPORE (ICIS news)--South Korea’s LG Chemical will replace naphtha with liquefied petroleum gas (LPG) as a feedstock in May, industry sources said on Monday.

LG Chem will use an estimated 30,000 tonnes of LPG instead of naphtha in May, a source said.

The replacement will be most likely in first half of May as the Korean end-user had recently purchased an open spec naphtha cargo for delivery in second half of May, another added.

Some northeast Asian end-users have aimed to increase liquefied petroleum gas (LPG) usage as a feedstock instead of naphtha due to the latter's current high costs.

Naphtha prices hit a record high of $931/tonne CFR (cost and freight) Japan last week.

Asian naphtha prices closed softer, with second-half May indications pegged at $924.75-925.75/tonne CFR Japan and first half June traded at $924.00/tonne CFR Japan.

Demand for naphtha as a feedstock has weakened on relatively high costs and poor margins from downstream derivatives.

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

By: Desmond Chia
+65 6780 4359

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