16 April 2008 10:30 [Source: ICIS news]
SINGAPORE (ICIS news)--The flow of arbitrage naphtha supplies from the west to the east has resumed this week, with Vitol seen moving a cargo from the Mediterranean to northeast Asia due to poor European demand, industry sources said on Wednesday.
Vitol was seen fixing a vessel to load 55,000 tonnes of naphtha supplies on 22 April and the cargo is expected to arrive some time in the first half of June. The price could not be ascertained.
The price was much cheaper than if one was to source from northwestern ?xml:namespace>
The last reported flow of cargoes from the west to east was at the end of March, with west-to-east differentials of $35-40/tonne (€22-€25) and enough to entice players to move cargoes from Europe and n
Freight costs were pegged at around $32-37/tonne depending on the size of the vessels used which ranged from 55,000-75,000 tonnes.
Weakness in the western naphtha markets due to lacklustre demand from European end-users was pushing suppliers to divert their supplies to northeast
However, Asia could not absorb these supplies as demand from end-users there was also weak due to the relatively high costs of naphtha feedstocks coupled with poor margins from downstream derivatives, he added.
Even without the wide west-to-east differentials, European suppliers would still have to move their cargoes to the east as there were no other outlets, an Asia-based source added.
As long as it suited their own business strategies, they would just move their cargoes, another source said.
“We just have to wait and see. There may be some more movements at the end of April or May,” a trader said.
Demand for naphtha from end-users in Europe had been weak and the situation had been exacerbated by lacklustre demand for mogas in Europe and the
Meanwhile, Asian demand for naphtha as a feedstock has weakened as relatively high costs and poor margins from downstream derivatives kept Korean cracker operators, in particular, sidelined.
Korean end-users had mostly covered their May requirements and some were now seeking June cargoes but they were likely to wait until prices softened, market sources said.
($1 = €0.63)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|