06 October 2011 07:44 [Source: ICIS news]
By Felicia Loo and Clive Ong
Naphtha prices in Asia closed on Wednesday at $860-861/tonne (€645-646/tonne) CFR (cost and freight) Japan - the weakest level since 27 June, with the naphtha crack spread versus November Brent crude futures narrowing to a two-month low of $97.60/tonne, according to ICIS data.
At midday on Thursday, naphtha prices were higher at $866.50-869.50/tonne CFR Japan on the back of overnight gains in global crude futures following the release of US government data confirming an unexpectedly large fall in domestic crude stocks.
In Asian trade on Thursday, NYMEX crude and Brent crude softened but continued to trade above $79/bbl and $102/bbl levels, respectively.
“There are more [naphtha] cargoes available in the market and the premiums are narrowing,” said a northeast Asian trader.
He added that “margins are worsening and some petrochemical makers are already cutting runs” in northeast
Integrated LDPE margins fell by $56/tonne week on week to $448/tonne on 30 September, and HDPE margins lost $67/tonne to $298/tonne in the same period, according to ICIS.
Meanwhile, butadiene prices were assessed at $2,700-2,800/tonne CFR in the week ended 30 September, down by 20.8% from four weeks ago, ICIS data showed.
Spot prices of styrene monomer (SM) closed at below $1,300/tonne FOB (free on board)
“The overall market is still weak as the fourth quarter is a traditionally slow season for SM and downstream styrenics market,” said a Korean trader.
With the uncertain economic outlook in the
“With several plant outages and maintenance ongoing in
Reflecting a bearish market, South Korea’s Honam Petrochemical bought by tender 50,000 tonnes of open-spec naphtha for delivery to Yeosu and Daesan in the first half of November at premiums of $3.50/tonne and $4.00/tonne to Japan quotes CFR.
The premiums were higher in previous South Korean spot tenders, where the cargoes were awarded at
On 21 September, FPCC restarted its 700,000 tonne/year No 1 naphtha cracker located in Mailiao following a prolonged outage since May. The cracker is now running at 90% capacity. The company also runs a 1.03m tonne/year No 2 cracker, which is operating at 100% capacity.
“The market is waiting for
The possibility of cuts on production rates by downstream players is weighing on naphtha prices, traders said.
Honam Petrochemical’s Daesan-based PP plant will remain shut for another 10 days after the 20-day turnaround because of poor market conditions, a company source said.
A source from Korea Petrochemical Industry Co said the company is considering cutting production at its 470,000 tonne/year PP plant at
Regional crackers are not seeking much naphtha supplies in the spot market, traders said.
“Crackers are minimising their requirements and their [naphtha] stocks are more than comfortable,” one trader said.
($1 = €0.75)
Additional reporting by Chow Bee Lin and James Dennis
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