S Korea’s Honam to run naphtha crackers partly on LPG from June

25 April 2011 04:50  [Source: ICIS news]

SINGAPORE (ICIS)--South Korea’s Honam Petrochemical plans to run its crackers partially on liquefied petroleum gas (LPG) from June because of soaring feedstock naphtha prices, industry sources said on Monday.

The two crackers – the 750,000 tonne/year naphtha cracker at Yeosu and the 1m tonne/year naphtha cracker at Daesan – are running at 100% capacity on naphtha, they added.

“The switch, starting from June, will be partial. Not more than 10% of the runs will be based on LPG,” said one source, who declined to be named.

The margin between LPG and ethylene was still better than that of naphtha in northeast Asia, according to ICIS Pricing’s Weekly Margin – Ethylene Asia report dated 15 April.

However, the supply pool of aromatics is expected to tighten as the partial switch to LPG takes place, traders said.

Asia naphtha prices galloped to $1084.50-1086.50/tonne (€748.3-€747.7/tonne) CFR Japan in the week ended 22 April, up by $29/tonne from the previous week on the back of tight supply and robust crude futures.

($1 = €0.69)

Additional reporting by Mahua Chakravarty

For more on naphtha, visit ICIS chemical intelligence

By: Felicia Loo

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