23 July 2013 05:21 [Source: ICIS news]
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SINGAPORE (ICIS)--Asia will receive around 3m tonnes of naphtha supplies from the Middle East in August, up 7% from the levels in July, traders said on Tuesday.
Around 2.8m tonnes of Middle East naphtha is being shipped to Asia this month, they said.
Higher volumes from the Middle East, comprising spot and term material, are exerting downward pressure on the naphtha market, they added.
“The imports are increasing and the Middle East barrels will be the key,” said one trader.
At midday, open-spec first-half September prices dropped by $1-2/tonne from Monday to $905.50-908.50/tonne CFR (cost & freight) Japan, in spite of higher crude futures, as rising Middle East inflows weighed on the market.
Prices were comparatively lower than the levels on 19 July when the contract closed at $916.50-918.50/tonne CFR Japan, according to ICIS.
The naphtha crack spread narrowed to $94.38/tonne (€71.73/tonne) on Monday against Brent crude futures, from $102.78/tonne on 19 July, ICIS data showed.
The rise in Middle East naphtha inflows into Asia coincided at a time when Asia’s butadiene (BD) prices were on a downward spiral.
BD prices have been falling since mid-February, shedding 60%, because of oversupply and continued weakness in demand amid the global economic downturn.
On 19 July, BD was assessed at an average of $870/tonne CFR northeast (NE) Asia, according to ICIS data.
($1 = €0.76)
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