10 February 2012 04:01 [Source: ICIS news]
By Felicia Loo
Open-spec prices in Asia were assessed at $1,034-1,037/tonne (€776-778/tonne) CFR (cost and freight) Japan, up by $6-7/tonne from Thursday’s close when the contract surged to $1,028-1,030/tonne CFR Japan – the highest since 11 May, according to ICIS data.
The inter-month spread between second-half March and second-half April contracts widened to $15/tonne in backwardation, from $12.50/tonne in the previous week, ICIS data showed.
“There are supply constraints and there will be further (price) upside,” said a Western trader.
Moreover, end-users’ demand is expected to be firm amid a lighter cracker turnaround in April this year, traders said.
On the other hand last year four South Korean crackers shut their respective plants for regular maintenance from April to May, with a total of 2.93m tonne/year of cracker capacity idled during that period, the ICIS survey showed.
“Currently, end-users’ stocks are low and they will seek more spot supply. Prices do rise quickly as soon as there is extra spot demand,” said a trader.
Taiwan’s Formosa Petrochemical Corp (FPCC), which has raised the operating rate at its three naphtha crackers in Mailiao to 90% capacity this week because of a pick-up in derivative demand, is seeking more spot material for delivery at the end of March.
There was more demand for ethylene from the downstream polyethylene (PE) and monoethylene glycol (MEG) sectors. FPCC operates a 700,000 tonne/year No 1 cracker, a 1.03m tonne/year No 2 cracker and a 1.2m tonne/year cracker at Mailiao.
The market is also supported by low deep-sea imports from Europe, with Asia expected to receive 110,000-150,000 tonnes of arbitrage naphtha from
Some 250,000-300,000 tonnes of European naphtha arrived in
The cold weather in
India-based Mangalore Refinery and Petrochemicals Ltd (MRPL) has sold by tender 35,000 tonnes of naphtha for loading in early March at a premium of $34.25/tonne to Middle East quotes FOB (free on board).
MPRL previously sold by tender 35,000 tonnes of naphtha for loading on 26-28 February, at a premium of $32.25/tonne.
Additional reporting by Peh Soo Hwee
($1 = €0.75)
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