01 December 2010 04:21 [Source: ICIS news]
By Felicia Loo
SINGAPORE (ICIS)--Asia’s naphtha crack spread is expected to charge higher after hitting over a 10-month high earlier this week, as regional demand outpaces supply in spite of heavy deep-sea inflows from Europe, traders said on Wednesday.
The prompt H1 January naphtha crack spread versus January ICE Brent crude soared to a 10-month peak of $171.80/tonne (€132.30/tonne) on Tuesday. The crack spread was assessed at $162.93/tonne in the week ended 26 November.
The spread between H1 January/H1 February contracts firmed to a backwardation of $9.50/tonne on Tuesday, up $1/tonne from Monday. The inter-month spread was quoted at $8.25/tonne on Friday.
The spread between H2 January/H2 February contracts strengthened to a backwardation of $8.50/tonne on Tuesday.
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Refinery maintenance has drained off exports from the Middle East producers, and a diesel supply crunch in
Ethylene prices were quoted at $1,080-1,120/tonne CFR (cost & freight) NE (northeast) Asia, up from $960-980 a month ago.
Another trader added: “Downstream prices are still doing well.”
A propylene cargo was booked by an end-user at $1,250/tonne CFR China for December/January shipment – a level deemed relatively strong.
Reflecting strong end-user demand from northeast Asia, Honam Petrochemical bought 100,000 tonnes of spot full range and open spec naphtha for H1 January delivery, at Japan market quotes plus $7.50/tonne CFR Korea and open spec naphtha at plus $6.00/tonne to Japan market quotes CFR Japan.
In addition, LG Chem bought up to 100,000 tonnes of open spec naphtha for H1 January at around
Meanwhile, in northeast
($1 = €0.77)
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