LG Chem buys 25,000t naphtha at steep $12/tonne discount

15 July 2010 10:26  [Source: ICIS news]

SINGAPORE (ICIS news)--South Korea’s LG Chem has bought 25,000 tonnes of open spec spot naphtha at a steep discount of $12.00/tonne (€9.48/tonne) reflecting poor market conditions, a company source said on Thursday.

The cargo - bought on Japan quotes CFR (cost and freight) basis - was due for delivery in the second half of August, he said.

“Naphtha’s in the dumps,” said a trader in Singapore.

LG Chem last bought a bigger volume of 100,000 tonnes of spot open-spec naphtha for first half of August delivery at discount levels of between $4.00-5.00/tonne to Japan quotes CFR.

The overall Asian naphtha market was hard hit by a cracker outage faced by major buyer Taiwan’s Formosa Petrochemical Corp, which coincided at a time when the company was about to take its other cracker off line for regular maintenance.

Reflecting the doldrums, the price spread between first half September and first half October contracts hobbled at a steep contango of $7/tonne, ICIS data showed.

($1 = €0.79)

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By: Felicia Loo

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