Demand from German petrochem makers rises: European naphtha to Asia shrink

06-Oct-10

Demand from German petrochemicals producers have been driving naphtha demand in Europe, pushing prices to five month highs, as per Bloomberg. European refiners will export little or no naphtha to Asia this month. Asian-bound shipments may drop to zero, from about 160,000 tons in September. Exports peaked this year at about 500,000 tons in May. Germany’s economy will expand 3.4% this year, almost three times the pace projected in May, as per the European Commission. Demand from consumer goods and automotive sectors is on the rise. Naphtha consumption is also increasing before the northern hemisphere’s winter as petrochemicals makers stop using liquefied petroleum gas as an alternative feedstock because of the increased need for LPG as heating fuel. Demand for European naphtha from Brazilian companies such as state-owned Petroleo Brasileiro SA and Braskem SA, is also driving prices higher amid a shortage of ethanol caused by a drought that’s harmed the country’s sugar crop. Demand in Asia is likely to fall next month as chemical plants shut for maintenance. Formosa Petrochemical Corp. plans to halt its No. 2 ethylene plant on Oct. 5 for as many as 45 days. Taiwan’s state-owned CPC Corp. will close its No. 4 naphtha cracker on Nov. 3 for as many as 55 days. Titan Chemicals Corp. will restart its No. 2 naphtha cracker at Pasir Gudang in southern Malaysia in late October after maintenance, ICIS, a chemical news and pricing service, reported on Oct. 1.