Naphtha crackers operating at near full capacity in South Korea

Deteriorating demand from China has failed to impact the bullish sentiments of petrochem producers in South Korea- Naphtha units are currently running at almost full capacity despite concerns of waning demand from China for petrochemical products. According to Reuters, the producers have started prompt-delivery purchases last week, with major buyers including YNCC Petrochemical, Lotte Daesan, and Hanwha expected to seek one or two April delivery cargoes, indicating strong buying from South Korea. LG Chem has already bought 2 H1-April delivery cargoes last week at a double-digit premium. South Koreans had dropped or cut term naphtha volumes with Middle Eastern suppliers such as Saudi Aramco and Kuwait Petroleum Corp (KPC) due to high premiums and lower supplies. In the event of higher naphtha prices, South Koreans generally switch to liquefied petroleum gas (LPG) as an alternative, but a recent hike in LPG prices is holding back petrochemical firms from making the switch. LPG prices are also supported by planned supply cuts from Saudi Arabia.
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