Japanese petrochem makers switching from naphtha to low cost feedstock?

21-Oct-05

Japanese petrochemical plants can switch 5-10% of feedstock use from naphtha to non-naphtha. However, naphtha accounted for about 96% of Japan's petrochemical feedstock needs in 2004, in comparison to 68% in Europe and 22% in the United States. Escalating crude prices have triggered a rise of over 45% in naphtha prices this year. In August 2005, spot naphtha jumped to a record high above US$600 a ton, C&F Japan due to supply shortages caused by Hurricane Katrina, which battered key oil facilities in the United States Gulf coast. Will Japan reduce its dependence on naphtha as a feedstock material. Showa Denko KK is one such Japanese petrochem maker that plans to upgrade its Oita plant. After the upgrades, cracker will be able to switch as much as 50% of its feedstock use (from the current 30%) to non-naphtha materials such as butane, natural gas liquid and gas oil.