26 April 2013 15:06 [Source: ICIS news]
LONDON (ICIS)--European naphtha prices have rebounded slightly to rise above $800/tonne (€616/tonne) this week, but trades are few and far between as domestic petrochemical demand has fallen further because of the spring cracker maintenance season, industry sources said on Friday.
Trade in the open market session has slowed down ever since a drop below the $800/tonne mark on 12 April fuelled a short-lived buying spree early last week.
Sellers are now refraining from lowering offers, resulting in a stalemate in sales, sources said.
“It is a bit quiet. Sellers want high numbers. The market is long but they don’t offer aggressively. It doesn’t tally up,” a trader said.
Naphtha traded for the first time only on Thursday during this week's daily open market sessions, and there were no guarantees of a trade on Friday, sources said.
Market fundamentals are bearish in the European naphtha market, with sales to the Asian petrochemical sector deemed the only bull factor.
"Local petrochemical demand is low as the cracker in Moerdijk [in the Netherlands] is not running, and BASF is going down," a buyer said.
Domestic petrochemical demand is low due to a heavy cracker turnaround. Shell Nederland Chemie BV (SNC) has declared force majeure on all cracker products because of a restart delay at its cracker in Moerdijk.
Meanwhile, a second major cracker - BASF's cracker in Antwerp, Belgium - is due to be shutdown on 26 April. The shutdown is expected to last until 24 June.
A second trader said: "The shutdowns certainly cut the demand even more."
The main application of naphtha is in the petrochemical production of olefins. Naphtha is also used as a feedstock for gasoline blending.
($1 = €0.77)
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