Asia Naphtha-Arb Supplies may be Less than Expected
Arbitrage supplies from the West to Asia are likely to be less than the initially expected 300,000t due to weak fundamentals in Asia while European naphtha prices recover above $400 a tonne, industry sources said on Friday.
European naphtha prices rose to about $406–$407 a barrel on Thursday, up nearly $26 from the previous session, while Asian naphtha was at $416, about $16 higher than Wednesday's session.
The Asian market has been under pressure this week due to the malfunction of naphtah units in Taiwan, a major naphtha producer. Formosa Petrochemical had to indefinitely delay the restart of its number one naphtha unit due to an explosion while another Taiwan firm, CPC, will shut down its smallest naphtha cracker on 18 March as petrochemical margins weaken further.
"Last week was okay for arbitrage to work. This suddenly isn't the case this week," said a regional naphtha trader.
The Northwest Europe-Asia naphtha arbitrage window shut earlier this week for the first time in over two months, as market sentiment tanked following problems at cracking facilities in Asia.
So far in arbitrage fixtures, Total was expected to ship 30,000t of naphtha for 1–3 March loading from Europe to Japan or Singapore, while Vitol had booked vessels to ship two cargoes, or 110,000t of naphtha to travel from the Mediterranean.
The first cargo will be off to Japan on 15 March, and the other cargo will be shipped off to another Asian country on 8 March, industry sources said.
Repsol had also fixed a vessel called Hellespont Promise to ship 55,000t of naphtha from Spain to Japan on 15 March. Glencore was expected to move 55,000t of naphtha from Greece to Asia, and a couple of smaller cargoes from South America in April.
"It's not definite to say that the expected volumes will all arrive here. If the market remains like this, we can't expect more (arbitrage supplies) to be loaded (from Europe) in the second half of the month," said a regional naphtha trader.
So far, about 1 million tonnes of naphtha has been fixed from the West to Asia in first three months of the year.
By Angela Moon, Reuters.
quoted from: www.chemicals-technology.com
European naphtha prices rose to about $406–$407 a barrel on Thursday, up nearly $26 from the previous session, while Asian naphtha was at $416, about $16 higher than Wednesday's session.
The Asian market has been under pressure this week due to the malfunction of naphtah units in Taiwan, a major naphtha producer. Formosa Petrochemical had to indefinitely delay the restart of its number one naphtha unit due to an explosion while another Taiwan firm, CPC, will shut down its smallest naphtha cracker on 18 March as petrochemical margins weaken further.
"Last week was okay for arbitrage to work. This suddenly isn't the case this week," said a regional naphtha trader.
The Northwest Europe-Asia naphtha arbitrage window shut earlier this week for the first time in over two months, as market sentiment tanked following problems at cracking facilities in Asia.
So far in arbitrage fixtures, Total was expected to ship 30,000t of naphtha for 1–3 March loading from Europe to Japan or Singapore, while Vitol had booked vessels to ship two cargoes, or 110,000t of naphtha to travel from the Mediterranean.
The first cargo will be off to Japan on 15 March, and the other cargo will be shipped off to another Asian country on 8 March, industry sources said.
Repsol had also fixed a vessel called Hellespont Promise to ship 55,000t of naphtha from Spain to Japan on 15 March. Glencore was expected to move 55,000t of naphtha from Greece to Asia, and a couple of smaller cargoes from South America in April.
"It's not definite to say that the expected volumes will all arrive here. If the market remains like this, we can't expect more (arbitrage supplies) to be loaded (from Europe) in the second half of the month," said a regional naphtha trader.
So far, about 1 million tonnes of naphtha has been fixed from the West to Asia in first three months of the year.
By Angela Moon, Reuters.
quoted from: www.chemicals-technology.com
