03 January 2013 03:48 [Source: ICIS news]
SINGAPORE (ICIS)--Asia’s naphtha prices rose sharply on Thursday morning, tracking overnight gains in global crude futures, traders said.
Fundamentally, tightening supply helps support prices as reflected in a stronger price spread, they added.
Open-spec second-half February contract rose by $2/tonne on Thursday morning at $973-976/tonne (€739-742/tonne) CFR (cost & freight) Japan, according to ICIS data.
The spread between the second half of February and the second half of March contracts widened to a $17/tonne backwardation on 2 January, from a backwardation of $15.50/tonne on 31 December, ICIS data showed.
The surge in prices was a response to lower Indian exports and tighter flows from the Middle East, traders said.
Furthermore, spot demand is likely to increase in tandem with higher cracker runs, they added.
FPCC operates a 700,000 tonne/year No 1 cracker, a 1.03m tonne/year No 2 cracker and a 1.2m tonne/year No 3 cracker in Mailiao. All three plants were running at 85% of capacity in December.
South Korea’s Yeochun NCC (YNCC) increased the operating rates at its three naphtha crackers in Yeosu to 100% of capacity in January from 90% in December because of healthy demand from the derivative polyethylene (PE) sector in the country.
YNCC’s three crackers at the site have a combined nameplate ethylene capacity of 1.9m tonnes/year.
($1 = €0.76)
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