Muted naphtha demand, increasing supplies in Asia: prices dip to week's low

27-Aug-09

Unenthusiastic spot demand for open-spec naphtha and a possible supply increase has pulled down naphtha prices in Asia. Prices slackened to a week's low, while cracks fell to their lowest in three weeks. Demand has remained muted as the expected buying by traders from South Korea for H1 October has not materialized. Deals have not yet been concluded despite several undisclosed talks in South Korea for heavy grade naphtha, being quoted at a premium of US$8-9/ton. Market for light naphtha has not perked up. Japan's Mitsui Chemicals bought 25,000 tons of open-spec naphtha for H1-October arrival at a premium of near US$5/ton to Japan spot quotes on a cost-and-freight (C&F) basis. South Korea's leading ethylene producer YNCC is running its 400,000 tpa naphtha cracker at 90% capacity following an outage last Friday. Supplies in Asia are expected to ease with an additional 200,000 tons/month from Qatar starting October.