Supported by demand, naphtha price and margins in Asia are at a month high of US$794/ton and US$60.35/ton premium respectively, as per Reuters. Demand for naphtha feedstock is improving as petrochemical makers have started to restore run rates as petrochemical margins get healthy.
South Korea's LG Chem is said to have bought 25,000 tons of naphtha for H1-August arrival at Daesan at premiums of about US$3.50/ton to Japan quotes on a cost-and-freight (C&F) basis. This comes a day after its competitor Honam bought similar volumes for H1-August at Yeosu at premiums of about US$2/ton. Malaysia’s Titan also bought a 30,000 ton cargo on Tuesday for H1-August arrival at flat to premiums of US$2/ton.
However, many doubt the duration of this rally without sustainable demand for petrochemicals, which would make it an uphill task for producers to pass on raw material costs to consumers. Additionally, demand from China continues to be muted.
04-Jul-12 
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