18 July 2013 11:58 [Source: ICIS news]
SINGAPORE (ICIS)--Open-spec naphtha’s intermonth spreads and crack values in Asia narrowed on Thursday, on concerns over possibly weaker demand arising from cracker outages in Taiwan and China, traders said.
Open-spec first-half September contract stood at $907.00-909.00/tonne (€689.32-691.84/tonne) CFR (cost & freight) Japan at the close of trading on Thursday, up $5.50/tonne Wednesday, according to ICIS data.
However, the backwardation between the first-half September and first-half October contracts narrowed 50 cents from Wednesday to $6/tonne on Thursday, and the naphtha crack spread versus September Brent crude futures lost 2.5% to $94.18/tonne over the same period, ICIS data showed.
A couple of the naphtha buyers were facing fresh cracker outages that are weighing on market prices of the petrochemical feedstock, traders said.
Taiwan’s Formosa Petrochemical Corp (FPCC) shut its 700,000 tonne/year No 1 naphtha cracker in Mailiao on Wednesday night due to a power outage. It is unclear when the facility can resume operations.
The power outage did not affect FPCC’s two other naphtha crackers at the site. Its 1.03m tonne/year No 2 cracker and its 1.2m tonne/year No 3 cracker are currently running at full rates, a company source said.
Meanwhile, in China, Shanghai SECCO Petrochemical has shut its 300,000 tonne/year linear low density polyethylene (LLDPE) unit and its 250,000 tonne/year polypropylene (PP) unit in Shanghai because of a technical issue at its cracker, market sources said on Thursday.
Separately, a source close to the company said the 1.2m tonne/year naphtha cracker was shut in the afternoon of 17 July but it is now in the process of being restarted.
($1 = €0.76)
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