Asia naphtha lags behind surge in crude

16 April 2008 04:44  [Source: ICIS news]

By Florence Tan

SINGAPORE (ICIS news)--Prices of aromatics in Asia rose on Wednesday but naphtha lagged behind sharp gains in crude, which surged past $113/bbl overnight to create fresh record.

First half June naphtha opened $8.50/tonne higher on Wednesday to $932.50-935.50/tonne CFR (cost and freight) Japan. While Brent crude has risen nearly 2% earlier this week, naphtha was up by only 0.11% as buyers resisted high prices.

NYMEX May crude futures touched an all-time high of $114.08/bbl in intra-day trade on Tuesday amid supply concerns at Mexico, rising diesel demand in China and a weak US dollar.

It softened to $113.59/bbl on Wednesday in Asian trade  as the US dollar strengthened against the Euro. Mexico has also reopened two out of three of its oil ports after they were shut on bad weather.

Asia aromatics prices were up around $10/tonne on Wednesday from a day ago in reaction to the crude spike, traders said.

Benzene prices rebounded $10-15/tonne to $1,085-1,100/tonne FOB (free on board) Korea. An offer was heard for a big berth any June loading at $1,094/tonne against a bid at $1,084/tonne.

Toluene prices edged $5/tonne higher to $1,030-1,040/tonne FOB Korea as selling indications were at $1,040-1,045/tonne for second half May loading.

Buy-sell indications for styrene monomer (SM) May parcels were pegged at $1,405-1,425/tonne FOB Korea, up $5-10/tonne from Tuesday.

In eastern China, domestic offers were cited at yuan (CNY) 11,450/tonne ($1,638/tonne) ex-tank, around CNY50/tonne higher than previous quotations.

The crude surge also led to higher paraxylene (PX) contract nominations on Tuesday, causing downstream purified terephthalic acid (PTA) makers to withdraw their spot offers, a source from Taiwanese PTA maker Tuntex Petrochemical said.

“If PX is around $1,360-1,390/tonne CFR Asia, it would be suicidal to continue selling PTA below $1,000/tonne CFR China,” he said, adding that this might again delay PTA contract negotiations.

($1 = CNY6.99)

Desmond Chia, Clive Ong, Hong Chou Hui and Mahua Chakravarty contributed to this article.

By: Florence Tan
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