SK Energy to ramp up operations to 100% at No.1 naphtha cracker

11-Apr-08

South Korea's SK Energy plans to shortly ramp up operations at its 210000 tpa No.1 naphtha cracker, due to improving ethylene margins. SK's No.1 naphtha cracker has been running at 80% operating rates since early-March due to poor margins. This situation has changes as ethylene prices are currently at US$1350/ton - almost US$400 above benchmark outright naphtha prices this week. Samsung Total Petrochemical, that reduced its cracker operations to 90% in mid-March is also considering operation hikes at its 850,000 tpa naphtha cracker. An ethylene-naphtha spread of more than US$275-400, depending on cracker configuration, would typically cover overhead costs and make ethylene production profitable. Most other players are shying away from the record naphtha prices and contemplating a switch to cheaper liquefied petroleum gas as an alternate feedstock.