21 November 2011 05:00 [Source: ICIS news]
By Felicia Loo
SINGAPORE (ICIS)--Naphtha spot prices in Asia are likely to move sideways this week because of weak demand, ample supply from Indian refiners and negative petrochemical margins, traders said on Monday.
The open spec Asian naphtha contract for the first half of January fell by $11/tonne (€8/tonne) from Friday to $857.00-860.00/tonne CFR (cost and freight) Japan on Monday, ICIS data showed.
The naphtha crack spread versus January Brent crude futures was assessed at $52.68/tonne on Friday, down from $36.75/tonne in the previous week.
The crack spread narrowed from $57.05/tonne on Thursday, which was the highest since 1 November because of the strength in ?xml:namespace>
“The (naphtha) market does not have strength. In fact, it is limping,” said one trader.
The spread between the naphtha contracts for the first half of January and the first half of February was assessed unchanged at parity on Friday, ICIS data showed.
The inter-month spread between the naphtha contracts for the second half of January and the second half of February widened to minus 50 cents/tonne from parity in the week earlier.
Indian refiners are expected to ship out 900,000 tonnes of naphtha in December, unchanged from November at a time of high refinery runs in
For October, Indian naphtha exports were at 800,000 tonnes.
A few regional crackers have reduced the rates at their plants or have brought forward plant maintenance because of a margins slump and prevailing low olefins prices.
The ethylene margin in
“There isn’t any (naphtha) spot buying from
The production at the cracker was expected to be maintained at the above level in December. The cracker was running at 80% of capacity in October.
SK Energy will continue to run its 690,000 tonne/year No 2 cracker at the same site at full rates.
The 550,000 tonne/year No 2 VCM line located in Nanyo and owned by Tosoh Corp shut production on 13 November because of an explosion.
Tosoh's Nanyo VCM facilities, which also include a 250,000 tonne/year No 1 line and a 400,000 tonne/year No 3 line, get their ethylene feedstock from Idemitsu's cracker in Tokuyama, via a pipeline.
In a sign of weak demand, the spot differentials receded.
In its previous spot purchase, Honam Petrochemical bought 25,000 tonnes at parity for delivery in the first half of December.
($1 = €0.74)
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