27 January 2012 07:39 [Source: ICIS news]
SINGAPORE (ICIS)--Asian naphtha prices will draw support from tighter supply because of limited arbitrage shipments from
Prices will also be buoyed by lower Indian exports for the second successive month, they added.
“It is supply-driven,” said a trader, explaining why prices have surged and they are likely to rise further.
Open-spec naphtha prices for the first half of March rose to $974-977/tonne (€740-743/tonne) CFR (cost and freight)
On Thursday, the naphtha crack spread surged to an eight-month high of $143.38/tonne against Brent crude futures, the data showed.
“Prices are tracking the strength in
Refinery shutdowns in Europe have sapped supply availabilities of the petrochemical feedstock naphtha, resulting in tighter arbitrage shipments to
“The East (
European crackers are using more naphtha as alternative feedstock propane is getting more expensive, traders said.
In addition, the robust gasoline prices in
Overall, the naphtha market was buoyed by the strength in global crude values, which strengthened in the latter part of week, tracking a rally in the stock market.
A weak dollar also supported crude oil, after the US Federal Reserve statement said it will keep interest rates unchanged until 2014 in an attempt to stimulate the economy. The market is facing low quantities from Indian refiners, traders said.
The company has cut February export availabilities to two cargoes from the usual three to four lots, they added.
“The market is also expecting strong buying after China comes back from the Lunar New Year holiday,” said one trader.
Expectations that China, the biggest petrochemical importer in Asia, will adopt a more loose monetary policy going forward will boost trade in the commodities market.
The Chinese authorities are widely expected to adjust down the reserve requirement ratio for banks after China posted its slowest growth in two-and-a-half years, of 8.9% in the fourth quarter of 2011.
($1 = €0.76)
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