Europe naphtha falls over $20/tonne to year low

06 October 2008 16:27  [Source: ICIS news]

LONDON (ICIS news)--Europe’s naphtha prices fell $23/tonne to their lowest level for more than a year on Monday to $702-712/tonne, following pressure from plunging crude oil prices and very weak petrochemical and gasoline blending demand, traders said.

 

The bid-offer range has shed more than $120/tonne (€89/tonne) from last week, assessed on a CIF (cost, insurance and freight) NWE (northwest Europe) basis by global chemical market intelligence service ICIS pricing, there lowest level since 2 October 2007.

 

It has come down by around 40% from a record high of $1,168-1,178/tonne set on 3 July.

 

The downward pressure exerted by very weak European demand had also pushed crack values back down to -$9.90/bbl over the past two weeks, the lowest levels seen for two months.

 

Although there was some improvement, on Monday with values coming up slightly to -$9.30/bbl, players still saw very thin spot trading conditions for the feedstock.

 

"There are still many more sellers than buyers at the moment," said one source.

 

The EIA reported on Friday an eight-year low for US gasoline demand in July, an indicator of slumping global demand. At the same time, a report published by consultants Nexant Chemsystems highlighted a global slowdown in demand for products from downstream businesses.

 

The sentiment appeared to be that the lack of demand for both heavy and light naphtha would continue until at least the end of the year, traders said but there was still hope that an arbitrage window to the US could open to make up the hurricane season-induced shortfall.

 

“People are certainly looking at the possibility of sending naphtha west,” added one market player.

 

($1 = €0.73)

By: Alex Davis
+44 20 8652 3214

< previous article(ICIS Chemical Business podcast November 2, 2009)

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.

Printer Friendly