Asia's naphtha price fell to its lowest level in 18 months at US$830/ton on Thursday and margins dived to a week low as sentiment sank on Asia's top buyer Formosa shutting the largest of its three crackers unexpectedly, as per Reuters.
Japan's Idemitsu’s purchase of a H1-July cargo did not boost sentiments. The premiums paid were unclear, but traders said levels would likely be in the range of US$7-0/ton to Japan quotes on a cost-and-freight (C&F) basis.
Formosa is expected to keep the unit shut for about two weeks, at a time when naphtha feedstock demand has already been battered by bad petrochemical margins. Sellers were already concerned that Formosa had halted spot purchases as it had scheduled to shut its 700,000 tpa No 1 cracker for about 40 days starting June 19 and its 1.03 mln tpa No. 2 unit for two weeks starting mid-August. A two-week shutdown of its largest unit would wipe out around 130,000 tons of naphtha demand. |
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