03 August 2010 10:46 [Source: ICIS news]
(recasts throughout, adds impact on Asian naphtha market supply)
Some 300,000-500,000-tonne naphtha of Middle East origin was supposed to head to the
Traders had hoped for a diversion of spot Middle East supply to the
Usually, Middle East producers ship naphtha to
“In reality, the
The initial volume of up to half a million tonnes was workable on paper, meaning it could have been profitable, traders said.
“But shipping costs have gone up because there is so much spot supply in the market,” another trader said.
Now with outright naphtha prices in Asia climbing up to a seven-week high on robust crude futures at above $81/bbl, the petrochemical producers were in for a margin squeeze as the downstream markets did not look rosy either, traders.
“The producers will react to the high naphtha prices. They will address the issue,” said one trader.
Naphtha demand in this region was trickling down as end-users took their time to buy cargoes at a time of ample supply, traders said.
Meanwhile, ethylene prices hobbled at $850-880/tonne CFR NE Asia, compared with $880-900/tonne CFR NE Asia four weeks ago, ICIS data showed.
“I don’t see Asian naphtha turning for the better. In fact, it’s for the worst,” said a trader.
($1 = €0.76)
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