News Code : 44012

Petrotahlil - Asia naphtha prices spiraled lower as crude oil markets weakened on concerns of a slowdown in global demand stemming from the coronavirus spread.

On Thursday morning, naphtha prices averaged at around $447/tonne CFR (cost and freight) Japan for first-half April delivery, down by more than $15.25/tonne or 3% from the previous day’s Asia close.

Prices have fallen by $60.50/tonne from a week ago, sending them to their lowest since July 2017, ICIS data shows.

At midday, April ICE Brent crude oil futures declined 78 cents to $52.65/bbl following new cases of the coronavirus across the world, raising fears that energy demand would fall.

Frail demand for petrochemical production has dampened naphtha consumption, with northeast Asia end-users taking in less spot supplies while cargo premiums softened.

South Korea’s Yeochun NCC paid a premium of around $10.50/tonne to spot CFR Japan quotes for first-half April naphtha, down from nearly $19/tonne premium it paid for second-half March supplies.

Also reflecting the bearish market sentiment in the region, Taiwan’s Formosa Petrochemical (FPCC) secured just around 30,000 tonnes of second-half March naphtha, much lower than its average monthly intake of about 100,000 tonnes.

FPCC also paid a lower premium for the supply compared with its earlier purchase.

Naphtha’s crack spread at the close of Asia trade on 26 February sank to a five-month low $54.49/tonne, down from the previous session’s $52.55/tonne.

The crack spread is a measure of its refining margin.

Cracker turnarounds in Asia are crimping demand for the feedstock.

Taiwan’s CPC is carrying out scheduled maintenance at its No 3 cracker, and was in the market to export naphtha for March loading from Kaohsiung as part of efforts to divert surplus supply.

Follow us on twitter @petrotahlil 

Source : ICIS 


Send Comment

view latest news
More News