Global naphtha markets stay firm despite volatile energy prices

Crude on the Nymex were on a volatile trend since they moved below the US$95/barrel threshold at the beginning of November. This is the first time since June, that crude oil has settled slightly below or above US$93/barrel, as per ChemOrbis. ICE Brent crude oil also fluctuated slightly in the period to hover between US$106-108/barrel. Although the energy complex was far from showing a strong trend especially on the Nymex, spot naphtha costs in Asia and Europe managed to hold steady over the week. Plus, spot naphtha prices in Europe edged up owing to slight gains in energy prices from early November levels, in the region. According to the recent figures on Wednesday, crude oil futures for December delivery edged down on a weekly basis, falling by over US$1/barrel since the start of this month. ICE Brent crude futures, however, indicated an increase of around US$1.5/barrel week over week while they gained slightly more than US$2.5/barrel from early November. Global naphtha markets held almost stable in Asia and Europe over the week, whereas they moved up around US$15-20/ton both on CFR Japan and CIF NWE basis in the last two weeks. When a comparison with the beginning of the month is made, prices in Asia represented a softening of less than US$10/ton while they were up US$15/ton in Europe. Market players attributed firmer spot naphtha prices to increased demand for the feedstock. Indeed, buyers in Europe were said to be more interested in naphtha rather than higher priced propane nowadays. In the downstream PE market, a distributor in Italy voiced his early bullish expectations for new ethylene contracts given firm naphtha costs. “We sold out our LLDPE and HDPE cargoes for various origins with rollovers from October, while we obtained €40/ton increases for our West European LDPE cargos over late October. We expect to see firmer prices in the days to come while new ethylene contracts may even settle up in December,” he stated. In production news, an explosion occurred at Total’s Antwerp refinery in Belgium on November 19. The company shut the reformer unit at its refinery after the explosion, which occurred during a turnaround at a steam generation system in a gasoline production unit. As the third largest plant in Europe, the refinery has a capacity of 350,000 bpd. The petrochemical complex reportedly houses three naphtha crackers with capacities of 610,000 tpa, 550,000 tpa and 255,000 tpa, while the smallest one has been offline since 2012. In Asia, Taiwanese CPC Corp. reached full rates at their No. 6 cracker in Linyuan on November 19. The 720,000 tpa cracker was shut in September for a maintenance that ended in early October. On the other hand, the company shut their No.4 cracker with a 350,000 tpa ethylene capacity at the same site due to a three-month maintenance on October 10. According to ChemOrbis, China’s Fushun Petrochemical was expected to restart their two crackers with a combined capacity of 950,000 tpa in Liaoning in November following a prolonged shutdown that started in May. China’s Fujian Refining & Petrochemical shut their Fujian complex which produces 800,000 tpa ethylene in mid-October for two months due to a turnaround.