Naphtha price in Asia continued its downtrend, falling to an eight-month low of US$897/ton, although its margin rose slightly from low levels, as per Reuters. At US$93.69/ton, the margin continues to be down 30% from a month ago. This is because some petrochemical firms have reduced demand for naphtha after switching to a rival feedstock and trimming operating rates at their units.
"The overall cracking margins are mostly narrowing and liquefied petroleum gas (LPG) pricesare falling. These have caused the market to turn bearish when compared to before," a Singapore-based trader said. LPG can be used to replace 5 to 15% of naphtha feedstock in some Asian naphtha crackers, including those operated by top Asian naphtha buyer Formosa. Spot deals were mostly muted after purchases earlier this week from Malaysia-based Titan and South Korea's Lotte Chem. Although Formosa last week bought up to 100,000 tons of naphtha for H1-May arrival, traders opine that spot demand this month may be slow compared with its February and March purchases at more than 200,000 tons each.
ADNOC kept up its offers for three naphtha grades lifting May 2013 to April 2014 at record premiums of above $34 a tonne to its own price formula on a free-on-board (FOB) basis.