Jan-Apr naphtha imports in China more than double year on year

28-May-15

China's appetite for imported naphtha has grown since the start of 2015 amid strong demand from petrochemical producers, as per market sources in Platts. January-April naphtha imports rose 129% year on year to 1.65 million mt, with inflows in April alone climbing 255% year on year to 443,064 mt, as per data released by the General Administration of Customs. China typically imports heavy naphtha which is the main feedstock for producing aromatics like benzene, toluene and mixed xylenes. Sources attributed the higher imports to the start-up of a new aromatics plant by Zhejiang-based Zhongjin Petrochemical in June, and to strong ethylene production margins. The Asian ethylene-naphtha spread hit US$876.63/mt on April 22 this year, the highest level since September 15, 2006. Tight supply amid steam cracker turnaround season drove up the Asian ethylene market for the first four months of the year, said sources. The breakeven level for producing ethylene from naphtha is US$350/mt. Domestic naphtha production fell 8.4% year on year during January-April 2015 to 9.19 mln mt, as refiners maximized gasoline yield amid improving demand in the local market, according to NBS data. In China, state-owned refineries produce open spec naphtha mainly for captive use in their downstream petrochemical plants, while naphtha produced by teapot refineries is hydrotreated and used for blending gasoline, market sources said.