09 June 2008 10:10 [Source: ICIS news]
By Serene Cheong
(Updates with information on equities in paragraphs 14, 15, 16 and 19)
SINGAPORE (ICIS news)--Downstream naphtha and aromatics markets in Asia opened strongly on Monday as they played catch-up with front-month July NYMEX crude contract prices, which settled at a fresh high of $138.54/bbl late last week.
Naphtha was $61.50/tonne (€39/tonne) higher, with second-half July indications pegged at $1,158.00-1,161.00/tonne CFR (cost and freight) ?xml:namespace>
In the aromatics sector, benzene was up $25-30/tonne to $1,300-1,310/tonne FOB (free on board)
Asian toluene also climbed $45/tonne to $1,255-1,265/tonne FOB
For paraxylene (PX), notional buying indications were $30/tonne higher at $1,590-1,600/tonne CFR Taiwan for any July cargoes, but no firm offers were heard.
In the styrene monomer (SM) market, prices were lifted about $20-40/tonne from last Friday with the bid-offer range for July cargo pegged at $1,650-1,680/tonne FOB
SM traders were also optimistic about the further upside potential as inventories in the key Chinese market remained low and demand from downstream expandable polystyrene (EPS) sector was robust due to the building of temporary houses in quake-hit Sichuan.
The impact of crude’s rally also filtered down to the plastics industry as ethylene vinyl acetate (EVA) producers such as Formosa Plastics Corp raised July offers for a second time this month, citing high feedstock costs.
A fresh hike of $30/tonne for the 18% VA content grade to $2,445-2,450/tonne CFR China/southeast Asia for July loading cargoes was announced by the producer after a $20/tonne price increment was implemented last week.
“We have no choice as we are led by crude gains and we understand the downstream converters are also being squeezed,” a company official said.
“But we have no intention to give way on our prices due to our short supply so the markets may have to wait for a recession before the prices correct,” he added.
Benchmark crude palm oil (CPO) futures on the Bursa Malaysia traded at ringgit (M$) 3,682/tonne ($1,140/tonne) at 11:00 local time (03:00 GMT), M$82/tonne up from Monday's opening.
Regional equity markets, too, were not spared as indexes in Asia plummeted on fears of lower economic growth and consumption in the
Although automobiles and transportation were the hardest hit sectors, firms dealing with oil and petrochemicals did not escape unscathed as the stock prices of major producers such as
Crude, meanwhile, retreated slightly after Friday’s sharp gains. It eased $0.77/bbl to $137.85/bbl on Monday after settling at a fresh high of $138.54/bbl on Friday.
The jump in crude oil prices was attributed to the weakening dollar on the back of a
($1 = €0.63/M$3.23)
Desmond Chia, Mahua Chakravarty, Clive Ong, Helen Lee, Cheong Su Yeen, Jeremiah Chan and Isha Jha contributed to this article
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