Europe naphtha falls $26/t to near four-year low

27 October 2008 11:30  [Source: ICIS news]

LONDON (ICIS news)--Europe naphtha has fallen by as much as $26/tonne (€21/tonne) from Friday’s close to its lowest levels since early 2005 at $386-396/tonne, pushed down further by crude oil’s continuing plunge amid fears of a global recession, traders said.

 

The price, assessed on a cost, insurance and freight (CIF) northwest Europe (NWE) basis by global chemical market intelligence service ICIS pricing, was the lowest since $379-394/tonne CIF NWE recorded on 17 February 2005.

 

This fresh low means the feedstock has lost more than $370/tonne since the start of October, when the price was $757-767/tonne CIF NWE.

 

The gloom on global markets over the threat of recession fuelled further demand worries that pushed the crack spread back to -$17.50/bbl, after it had improved slightly to -$17.10/bbl on Friday.

 

“The conditions just keep getting worse,” said one source.

 

OPEC’s Friday announcement to slice 1.5m bbl from global daily output did little to hold back the downward trend for crude oil, which fell under $60/bbl in London during in early trading.  

 

In addition, downstream demand for naphtha has dried up, with various regional petrochemical firms announcing cracker shutdowns or rate cuts.

 

Naphtha players last week said the market was suffering a a two-pronged attack, with value being stripped off on a daily basis, but with sellers continually struggling to offload product.

 

($1 = €0.80)

 

To discuss issues facing the chemicals industry visit ICIS connect

 

By: Alex Davis
+44 20 8652 3214

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

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