16 December 2011 04:03 [Source: ICIS news]
By Felicia Loo
SINGAPORE (ICIS)--Asia’s naphtha prices are likely to stage an uptrend until late January, supported by strong spot buying from dominant importer ?xml:namespace>
The naphtha inter-month spread widened $1/tonne (€0.77/tonne) to $7.50/tonne in backwardation, while the prompt naphtha crack spread strengthened to near $100/tonne against Brent crude futures, according to ICIS data.
“The market is heading for a hike and this will be the case until the Lunar New Year,” said a trader.
The Lunar New Year takes place on 23-24 January 2012.
“The trading companies have rushed to buy lots of spot cargoes for January. The huge arbitrage volume for January has already been absorbed into the market,” the trader added.
The cargoes were transacted at a premium of $3.00-3.50/tonne to
Demand from FPCC is expected to remain strong in the first half of next year, because the company has scheduled to shut its 700,000 tonne/year No 1 cracker at Mailiao for a 40-45 day turnaround in August 2012.
Meanwhile, the South Korean crackers paid higher naphtha premiums this week for spot transactions for second half of January delivery, traders said.
Last week, the spot deals were transacted lower at premiums of $4.00/tonne and $5.00/tonne to
Separately, the outlook on
Chinese demand for petrochemicals is estimated at around 110m tonnes in 2011 and is expected to grow to around 160m tonnes by 2016, while domestic supply is expected to grow from about 70m tonnes in 2011 to around 110m tonnes in 2016, according to Pang.
Demand for petrochemicals will continue growing at a high rate through to 2015, but will grow at a slower rate than the levels seen in 2006-2010 as the economy cools, Pang said.
($1 = €0.77)
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