Naphtha prices in Asia rose in line with rising crude oil prices, mounting to two week highs. Lackluster demand however, has depressed naphtha cracks to three-month lows.
Demand will continue to be bearish due to the upcoming maintenance, resulting in a loss of at least 2.5 mln tons of naphtha demand in Japan, South Korea and Taiwan, amid bearish demand from China on account of the Lunar New Year break when buyers traditionally kept their petrochemicals stocks low for the week-long holiday.
In March, over 500,000 tons of naphtha demand will be lost as crackers are shut down for maintenance in South Korea and Japan. Concerns over lower demand from heavy maintenance work and the buildup of stocks have sent crack spreads to the lowest levels.
GS Caltex has been forced for about 8 days due to a mechanical glitch to shut its only 90,000 bpd naphtha splitter.