08 March 2013 16:40 [Source: ICIS news]
“Demand for naphtha is poor, propane is $180/tonne below naphtha for April,” a naphtha trader said.
“In April, yes, it’s [the propane-naphtha spread] -$180/tonne,” a naphtha producer said. “But there are no physical barrels in the front, so I think we could see it price itself out of the chem pool for some barrels, just to balance. That is my guess only, though.”
This price structure is extremely unusual, as propane prices are normally driven above naphtha values in the winter as a result of strong demand for heating fuel.
This year, increased liquefied petroleum gas (LPG) production in Asia and imports from the US, combined with lower demand, have resulted in a long European propane market and low prices.
Now, even with the prompt propane market described as tight, prices are said to be more reflective of the long paper market and values have stayed low.
Futhermore, the last few weeks have seen tight conditions in the naphtha market support prices, maintaining a wide spread between the two feedstocks.
When asked to describe petrochemical demand for naphtha, the producer said: “They [petrochemical buyers] don’t want to pay up in a tight market, so keep on living hand to mouth.”
Furthermore, petrochemical demand for feestocks is already limited to some extent.
“There’s maintenance going on,” the trader added. “Several crackers are down.”
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections