Europe naphtha goes to Asia as petchem producers favour LPG

LONDON (ICIS)--European naphtha continues to be sent to Asia because demand from the region's petrochemical sector remains low because economics currently favour the use of liquefied petroleum gas (LPG) as a feedstock, market participants said on Wednesday.

Traders said Asia would receive around 500,000 tonnes of naphtha in February. However, one market player said this was not an unusual amount to have gone when there was an open arbitrage between the two regions.

The trader noted that around 600,000 tonnes was sent to Asia in December.

Poor economics for gasoline blending have added to the low petrochemical demand, traders said.

The arbitrage to Asia has remained open, helped by a fall in the crack spread, which decreased to minus $1.35/bbl from plus $0.20/bbl on Tuesday.

At 11:45 GMT, the naphtha flat price was assessed at $847-855/tonne CIF (cost, insurance and freight) NWE (northwest Europe), slightly lower compared with the previous day’s range of $859-867/tonne.

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