Asian naphtha prices hit record high on crude

11 April 2008 04:00  [Source: ICIS news]

SINGAPORE (ICIS news)--Asian naphtha prices hit a record high despite relatively sluggish demand, as strong gains in crude oil exerted significant cost pressures, according to ICIS pricing data on Friday.

A first half June contract traded late Thursday at $931.00/tonne (€596/tonne) CFR (cost-and-freight) Japan as oil major Total sold to trader Trafigura. Crude prices settled at a fresh high this week above $110/barrel on NYMEX due to fears of low US energy inventories.

However, the Asian naphtha market remained weak due to lacklustre demand from Northeast Asian end-users as most had covered their May nominations.

“Naphtha prices are recently driven by volatilities in the crude oil markets, but fundamentally it is weak,” a market source noted.

This week, naphtha prices rose by a mere 1.41% versus a gain of 3.6% in the Brent crude markets.

The inter-month backwardation in the Asian naphtha market continued to narrow due to weak demand from Northeast Asian end-users, industry sources said Thursday.

The inter-month spreads between second half of May/second half of June was seen at $3.00/tonne Thursday, versus $5.00/tonne last week. “Backwardation is crunching on the current weakness,” a source added.

($1 = €0.64)

ICIS Copyright © Reed Business Information 2009

Author: Desmond Chia
+65 6780 4359

< previous article(ICIS Podcast: Chemical News Central 2 November 2009)

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.