Asia naphtha prices nosedive on crude, equity sell-off

05 August 2011 11:55  [Source: ICIS news]

By Felicia Loo

SINGAPORE (ICIS)--Naphtha prices in Asia plummeted on Friday, triggered by a massive global sell-off in equities and commodities, with investors fleeing to safe havens in cash and government bonds, traders said on Friday.

Battered by a slump in global crude futures, the second-half September naphtha contract closed at $905.50-907.50/tonne (€642.91-644.33/tonne) CFR (cost and freight) Japan – the lowest since 29 June 2011, according to ICIS data.

Prices had fallen from $1,012-1,014/tonne CFR Japan on 1 August, the highest this week.  The contract soared after Taiwan’s Formosa Petrochemical Corp (FPCC) declared a force majeure on all petroleum product exports in late Monday.

“The market is spooked by a potential double-dip recession,” said a trader.

September Brent crude on London’s ICE futures exchange was trading at $106.39/bbl, down by 86 cents/bbl from the previous close. Earlier, the North Sea benchmark fell to a session low of $104.30/bbl, down by $2.95/bbl and its lowest level since June 2011. Crude prices have fallen more than $10/bbl since the start of the week.

In open market trading on Friday, a second-half October naphtha cargo changed hands at $905.00/tonne. A second-half October cargo was done at $968.00/tonne on Thursday, ICIS data showed.

($1 = €0.71)

For more on naphtha, visit ICIS chemical intelligence

By: Felicia Loo

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