14 March 2011 12:48 [Source: ICIS news]
LONDON (ICIS)--The European naphtha cargo range fell by $31/tonne (€22/tonne) on the back of lower crude oil prices and a weaker crack spread caused by fears about the impact of the massive earthquake that hit Japan on 11 March, sources said on Monday.
The tsunami, aftershocks and explosions at the Fukushima Daiichi nuclear plant that followed the earthquake have exacerbated fears about the detrimental effect on Japanese demand for oil and naphtha.
At 11:00 GMT on Monday the Europe naphtha cargo range was assessed at $934-942/tonne CIF (cost, insurance and freight) NWE (northwest Europe). May Brent crude oil was at $111.70/bbl, while the crack spread was at minus $6.60/bbl.
On the afternoon of 11 March, naphtha was at $965-973/tonne CIF NWE, while May Brent was at $114.06/bbl and the crack spread at minus $5.50/bbl.
“The crack spread is dropping again because of Japan,” a source said.
Last week a market participant said that the situation was more complex. The longer-term effect on Japanese demand for naphtha would depend on the ratio of refineries going out of action compared with petrochemical plants. If more of the former went down, demand could increase and European material might be required.
“I still think that view is valid,” the source said on Monday. “I don’t think it’s clear yet, but the market is going with the reduced buying for now.”
There was news on Monday that most of Japan’s naphtha crackers were operating, although some were at reduced rates. It was unclear what effect, if any, this would have on the European market.
“It’s too soon to say,” another source said.
At 11:40 GMT, May Brent was at $112.33/bbl.
($1 = €0.72)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|