UpdateIndonesia's Chandra Asri cuts cracker runs on squeezed margins

04 November 2010 03:28  [Source: ICIS news]

(adds cracker margin, naphtha and ethylene prices)

SINGAPORE (ICIS)--Indonesia’s Chandra Asri has cut operating rates at its 600,000 tonne/year naphtha cracker in Merak, West Java to 75-80% since last week, partly due to squeezed margins from weakening ethylene (C2) spot prices, a company source said on Thursday.

Prior to the reduction, the cracker operated at 93-94% of its nameplate capacity, the source said.

“With the current situation in ethylene, we have to cut back the rates,” he added.

The cracker margin plummeted to $70-90/tonne (€49.7-56.8/tonne) from between $100-200/tonne, in the face of robust feedstock naphtha prices which surged in tandem with crude, ICIS data showed.

Asia naphtha surged to $791.75-794.75/tonne CFR Japan on Thursday morning, as global crude futures surpassed the $85/bbl-mark. On the other hand, ethylene prices slumped to $960-980/tonne CFR NE Asia.

Chandra Asri’s cracker also faced an equipment problem, which would be resolved soon, the company source said.

($1 = €0.71)

Additional reporting by Larry Tan

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By: Felicia Loo

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