07 February 2012 02:31 [Source: ICIS news]
SINGAPORE (ICIS)--Asia naphtha prices surpassed the $1,000/tonne (€760/tonne) level during morning trade on Tuesday, buoyed by overnight gains in Brent crude values amid a frigid winter in the West, traders said.
Open-spec naphtha prices for the second half of March rose by $16-17/tonne from Monday's close to $1,010-1,013/tonne CFR (cost & freight) Japan during early trading on Tuesday.
Traders attributed the rally in crude and oil product prices to the cold snap in the northern hemisphere, coupled with some refinery shutdowns in Europe and some parts of the US, and the geopolitical issues in the Middle East.
Asia is facing unusually low deep-sea naphtha supplies from Europe as crackers are using more naphtha instead of liquefied petroleum gas, whose prices have risen because of strong demand during the cold snap in the West, traders said.
"Naphtha supplies are very tight," said a buyer in northeast Asia.
In addition, there has been a reduction in naphtha exports from India, as well as lower spot availability from Middle Eastern refiners, traders said.
"It's a supply-driven situation. Any spot buying requirements in Asia will trigger higher [naphtha] prices because supplies are very tight," said a trader in Singapore.
($1 = €0.76)
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