23 September 2013 00:00 [Source: ICB]
Asia’s naphtha prices may draw support from tightening supply in the Middle East and Europe, while healthy petrochemical demand proffers the market a boost, traders said on 13 September.
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, the traders 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. As of 16 September, the company was resuming operations.
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 12 September.
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