A fall was seen in naphtha prices in Asia at the beginning of week, as prices tracked crude declines amid bearish manufacturing data out of China, traders said in ICIS. At midday on Monday, open-spec H2-February prices tumbled by US$23.50-24.50/ton from 2 January to US$437.50-440.50/ton CFR (cost & freight) Japan. Naphtha prices, that have fallen by 54% from year ago levels, were last seen at these levels on May 1, 2009. Crude futures were undermined by weak US manufacturing data and shrinking value of the euro. Moreover, downbeat data on China’s manufacturing sector also weighed on market sentiment at the start of the year.
Downstream, the petrochemical outlook in the key China market remains dim. Polyolefins prices in China are seen bearish in Q1-2015, stemming from poor demand and ample supply, which was augmented by new capacities that came on stream, industry sources said.
Pucheng Clean Energy started trial runs, to achieve on-spec production later this month at its 300,000 tpa linear low density polyethylene/high density polyethylene (LLDPE/HDPE) swing plant and 380,000 tpa polypropylene (PP) unit in late December 2014.
Shandong Shenda Chemical Industry started up its 200,000 tonne/year PP unit in early December.
Baofeng Energy’s 300,000 tpa LLDPE/HDPE swing plant and 300,000 tpa PP unit came on stream in November 2014.
Amid stable demand, the region has witnessed a supply glut for the past several months with increased deep sea cargoes arriving from the West, and rising exports from the Middle East. Polyolefin supply in China is expected to exceed demand ahead of the Lunar New Year holiday on 19 February.
06-Jan-15 
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