Asia’s naphtha prices are expected to be largely stable following volatile trading in the previous week, which saw prices tumbling to nine-month lows, as per ICIS. With global crude oil futures picking up slightly after having fallen below US$100/bbl last week, the trading fraternity adopts a largely cautious attitude amid ample supply and stable demand in the petrochemical feedstock market, they said.
Asia’s open-spec first-half June naphtha contract rose by US$5.50-6.50/ton to US$841-844/ton CFR (cost & freight) Japan on Tuesday, supported by overnight gains in Brent crude futures that pushed price above $100/bbl at the close of trade on Monday, according to ICIS data.
However, crude oil prices receded on Tuesday morning but stayed near US$100/bbl, following release of downbeat manufacturing data from China. HSBC’s flash April purchasing managers' index (PMI) for China declined 1.1 points to 50.5 from March. Naphtha prices slumped to US$824-826/ton CFR Japan on 16 April 2013, the lowest since 10 July 2012 when prices stood at US$815-817/ton CFR Japan.
Supplies will be ample because of abundant deep-sea material from the western markets while the end of active refinery maintenance in Asia will also boost the output of naphtha in the region. Demand, on the other hand, is seen stable and would be enough to absorb the available supplies. Premiums on naphtha spot trades last week, however, were knocked off from recent highs since supplies are easily obtainable, they said.
However, higher ethylene margins using naphtha feedstock helped support the market to some extent.
24-Apr-13 
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