14 September 2012 05:59 [Source: ICIS news]
By Felicia Loo
Open-spec naphtha prices rebounded on Friday morning, making crude-led gains after the US Federal Reserve started another stimulus program.
Naphtha prices for the second-half October contract rose by $5.50-6.50/tonne (€4.24-5.00/tonne) from Thursday to $1,000.50-1,003.50/tonne CFR (cost & freight)
“Petrochemical end-users are bearish on margins,” said one trader.
On downstream ethylene, buying sentiment remained weak as buyers stayed on the sidelines in anticipation of further price corrections because of easing tight supply conditions for October, traders said.
Ethylene prices were unchanged at $1,270-1,320/tonne CFR northeast (NE)
Northeast Asian ethylene margins slipped by $9/tonne to $27/tonne in the week ended 7 September, according to the ICIS margin report.
In view of the lower margins, Japanese chemical producer Maruzen Petrochemical trimmed the operating rate at its 520,000 tonne/year naphtha cracker at
Thai PTT Global Chemical (PTTGC) may reduce operating rate at its 515,000 tonne/year mixed-feed I-4 No 1 cracker at Map Ta Phut to 80% capacity from the current rate of 85-90% capacity, if feedstock naphtha prices continue to rise.
Spot naphtha buying interest from
FPCC is currently operating the 700,000 tonne/year No 1 cracker and the 1.2m tonne/year No 3 cracker at Mailiao at full capacity. FPCC is Asia’s dominant naphtha spot buyer, importing around 300,000 tonnes of spot material each month but it has been shunning the spot market in recent months on cracker issues, traders said.
The naphtha crack spread for second-half October fell by 11% from 12 September to $127.80/tonne on 13 September, the lowest since 29 August when the crack spread was at $123.33/tonne, according to ICIS data.
The intermonth spread between the second-half October and the second-half November naphtha contracts on Thursday 13 September weakened to its lowest level since 3 September, at a $12/tonne backwardation, the data showed. The backwardation was at $13.50/tonne on 12 September.
When that happens, the current supply crunch in
Reflecting a less than bullish naphtha market, Kuwait Petroleum Corp (KPC) sold 24,000 tonnes of light naphtha at a slightly lower premium in the week.
The cargo was done at a premium in the mid-$30s/tonne to
Additional reporting by Helen Lee
($1 = €0.77)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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