13 September 2013 06:57 [Source: ICIS news]
By Felicia Loo
SINGAPORE (ICIS)--Asia’s naphtha prices may draw support from tightening supply in the Middle East and Europe, while healthy petrochemical demand proffers the market a booster, traders said on Friday.
At midday, open-spec second-half October prices stood at $958-961/tonne CFR Japan, up by $7.50-8.50/tonne (€5.63-6.38/tonne) from Thursday, according to ICIS.
Despite leaner transactions – as traders are mostly away attending the Asia Pacific Petroleum Conference (APPEC) in Singapore – premiums concluded in naphtha tenders firmed up, reflecting improving market conditions.
“There is less [arbitrage] cargo availability,” said one trader.
For October, the deep-sea naphtha inflows from northwest Europe and the Mediterranean are expected to decrease because of active refinery maintenance, traders said.
Meanwhile, a plant outage in the Middle East might constrict naphtha exports to Asia, they added.
Saudi Arabia's Rabigh Refining and Petrochemical (Petro Rabigh) had to shut down operations because of a power outage that occurred on 11 September. Further details have not been disclosed.
The company, a joint venture between Saudi Arabian Oil Co and Sumitomo Chemical, said work is under way to restore electricity to restart production at its petrochemical complex in Rabigh, Saudi Arabia.
In recent transactions, Indian state-owned refiner Oil and Natural Gas Corp (ONGC) sold by tender a 35,000-tonne naphtha cargo for loading from Hazira in mid-October, at a premium of $25/tonne to Middle East quotes FOB (free on board) pricing.
The premium improved from its previous tender, in which ONGC sold a similar-sized cargo for early October loading from Hazira at a premium of $23/tonne.
India’s Mangalore Refinery and Petrochemicals Ltd (MRPL) sold a 35,000-tonne naphtha cargo for loading from New Mangalore to trading firm PetroDiamond. The deal for the cargo was done at Middle East quotes FOB pricing plus $29/tonne, with the loading dates on 8-10 October.
MRPL previously sold by tender a 35,000-tonne naphtha cargo for early October loading at a premium of $26/tonne to Middle East quotes FOB.
In the downstream market, tightening supply helped push ethylene prices by $10/tonne at the upper end to $1,270-1,300/tonne CFR NE (northeast) Asia on Thursday, according to ICIS. Prices were stronger than $1,210-1,250/tonne levels four weeks ago.
Meanwhile, polyethylene (PE) prices in China and southeast Asia rose in the week ended 6 September in response to plant shutdowns, according to ICIS.
LDPE film rose by $15-25/tonne to $1,530-1,575/tonne CFR China, while LLDPE film gained by $20/tonne to $1,460-1,485/tonne CFR China, the data showed.
PE import prices rose sharply in southeast Asia with LDPE registering the steepest increase of up to $80/tonne in the same period.
($1 = €0.75)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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