S.Korea’s Honam buys 75,000 tonnes naphtha for second half Oct

10 September 2012 04:22  [Source: ICIS news]

SINGAPORE (ICIS)--South Korea’s Honam Petrochemical has bought three naphtha cargoes totalling 75,000 tonnes for delivery in the second half of October, with premiums shooting up to the high teens/tonne levels because of a regional supply crunch, traders said on Monday.

Honam bought two cargoes for delivery to Daesan at a premium of $18.50/tonne (€14.43/tonne) to Japan quotes CFR (cost and freight), as well as a cargo for delivery to Yeosu at $18/tonne to Japan quotes CFR, they added.

Honam previously purchased two cargoes totalling 50,000 tonnes for delivery in the second half of October. The naphtha cargoes fetched a premium of around $11/tonne to Japan quotes CFR for delivery to Daesan and Yeosu.

The company has so far bought 275,000 tonnes of spot naphtha for October delivery, compared with 250,000 tonnes of spot purchase made for September delivery because of a lower usage of alternative feedstock, liquefied petroleum gas (LPG), traders said.

“They have a bigger spot requirement for October because of less LPG usage,” one trader said.

Firm spot buying from South Korean crackers have helped drive up premiums amid a tightly supplied market, traders said.

Honam runs a 1m tonne/year cracker in Yeosu and a separate 1.07m tonne/year cracker in Daesan, according to ICIS data. Honam is operating both crackers at 100% capacity, a company source had said.

($1 = €0.78)

By: Felicia Loo

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