200,000 tons of Western naphtha to arrive Asia in June

10-May-10

As per current status, Asia is expected to receive 200,000 tons of Western naphtha. This is less by 100,000 tons from May levels, and seems insufficient to meet healthy demand at a time when India is expected to lower its June exports. Propped by robust demand from China, demand in Asia has been strong, as crackers are operating at high rates since 2009. Additional crackers that have recently come onstream in South Korea, Singapore and Thailand have also added to the supply shortfall. Demand for June is reported to be firm amid high operating rates at crackers. Despite concerns of an ethylene glut after Thailand and Singapore added a nameplate capacity totalling 1.7 mln tpa in March, there are no signs of petrochemical margins falling into the red so far. But traders remain wary over the sustained strength of the naphtha market. ADNOC and Tasweeq will raise supplies due to additional gas output, and crackers may replace more of their naphtha feedstock with liquefied petroleum gas (LPG) from July. Europe may also push out more naphtha to Asia after July as gasoline demand is not expected to hold up.