BASF Ludwigshafen naphtha demand hinges on cracker restart date
Cuckoo James
18-Oct-2016
(adds analyst comments from seventh to ninth paragraphs)
LONDON (ICIS)–Any potential reduction in naphtha sales to the BASF Ludwigshafen petrochemical complex in Germany is contingent on when the two steam crackers at the site restart, traders and analysts said on Tuesday.
The impact could be minimal in a bullish naphtha
market.
BASF’s Ludwigshafen site has two steam crackers which process
about 2m tonnes of naphtha per annum, according to the
company’s website.
Each year, a total of around 620,000 tonnes of ethylene and
350,000 tonnes of propylene are produced at the two
plants.
“Until we know how long the crackers will be down it is hard
to say what sort of effect on demand [for naphtha] there will
be,” Robert Campbell, an oil market analyst at Energy Aspects
said.
The crackers consume approximately 6,000 tonnes of naphtha
per day, a naphtha trader said.
“I assume it will be shut down until the end of November. It will depend on what damage they find. If they find some nasty things it may last longer than a month,” a second analyst said.
The second analyst estimates a loss of over 150,000 tonnes of naphtha demand from the site per month will lead to a more bearish naphtha market.
“Sadly, it is good for the petrochemical margins,” the second
analyst said.
On Monday, an
explosion at BASF’s Ludwigshafen site caused a fire which
left two people dead and one missing, while eight workers
suffered serious injuries, according to BASF’s update at
10:00 London time on Tuesday. It added that 17 more people
had suffered minor injuries.
Product |
Company |
Country |
Location |
Capacity |
Unit |
Propylene |
BASF AG |
Germany |
Ludwigshafen |
140000 |
tonne/year |
Propylene |
BASF AG |
Germany |
Ludwigshafen |
200000 |
tonne/year |
Ethylene |
BASF AG |
Germany |
Ludwigshafen |
220000 |
tonne/year |
Ethylene |
BASF AG |
Germany |
Ludwigshafen |
400000 |
tonne/year |
Source: ICIS Plants and Projects Database
While the fire was extinguished at 21:30 local time on
Monday, the site remains closed as fire fighters and
authorities continue investigating the accident. BASF said
earlier that, in addition to the steam crackers, around 20
other plants were either
closed or partially running.
“The plant is down, but since the main fire seems to have
happened at the barge jetty I wouldn’t think the plant is
going to be idle for too long but this is not something I
know,” a second naphtha trader said.
A third naphtha trader said: “Nobody knows the impact for
now. Depends on when they restart [the crackers].”
Naphtha spot cargo prices was relatively stable on Monday
evening at $437-439/tonne cost insurance freight (CIF)
northwest Europe (NWE).
The European naphtha market is
bullish on renewed gasoline demand from the US, Latin
American and West African markets.
“The paper market doesn’t seem to care too much. I would have
thought that we could have seen some impact,” the second
trader said.
Additional reporting by Jonathan Lopez, Nel Weddle
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