As demand livens up in Asia, demand for prompt-delivery cargoes from South Korea on the rise

11-Feb-09

South Korean petrochemical makers have increased run rates at several crackers that have been running at reduced rates since the past 2-3 months. To meet this increased production, naphtha imports increased to 00,000 tons last week alone. Robust demand for prompt-delivery cargoes continues this week as South Korea's GS Caltex and Samsung Total have purchased about 75,000 tons of open-spec naphtha about US$10 higher than last week. LG Chem has paid US$5 more than last week for 25,000 tons of naphtha for H2-March delivery. YNCC and SK Energy both seek 2-3 cargoes for H1-April arrival, and March delivery respectively. Business confidence in the Asian petrochemical sector seems to be on a path of recovery. Several petrochem makers in Asia have seen better than expected performance in Q1-2009 because a sudden sharp fall in oil prices that have brought down operation costs considerable. The deterioration in prices has been arrested and overstocking of inventories seen in Q3 and Q4 of 2008 has been curtailed, along with steadying demand, particularly from China. Chinese buyers returned to the markets after New Year celebrations, according to a new report by HSBC.