07 July 2009 05:38 [Source: ICIS news]
By Desmond Chia
SINGAPORE (ICIS news)--Naphtha premiums in northeast Asia are climbing up as the region is plagued with tight supplies due to less arbitrage volumes from the west, industry sources said on Tuesday.
Supplies had been tight because volumes from the west had decreased, with July arrivals from northwest Europe (NWE) to northeast Asia (NEA) estimated at 150,000 tonnes, leaving the shortfall to be plugged by I?xml:namespace>
An estimated 1 million tonnes of naphtha arrived in NEA from
The cracker operator had also bought 75,000 tonnes at premiums of $8-9/tonne to
Its competitor, Honam Petrochemicals, bought 25,000 tonnes of the same material at a much higher premium of $9/tonne to
Taiwanese cracker operators normally pay lower premiums due to cheaper freight costs.
Premiums over the past two weeks had been on average $2.50-4.50/tonne higher than during the week of 15-19 June, when spot trades were sparse.
In June Honam Petrochemicals was seen in the market snapping up 75,000 tonnes of open spec material at a premium of $4.50/tonne to
Traders said premiums had been moving up since early June on tight supply, and at the same time buoyed by strong demand for gasoline in
“Premiums will likely continue to move up for the rest of this month [July] as the market will remain well-supported by the tightness as well as northeast Asian cracker operators running at close to full tilts,” a trading source noted.
Asian naphtha prices opened slightly higher on Tuesday. Second half August price indications were pegged at $590.00-593.00/tonne CFR (cost and freight) Japan, first half September at $583.50-586.50/tonne CFR Japan and second half September at $579.00-582.00/tonne CFR Japan.
($1 = €0.72)
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