Asian Petrochemical Feedstocks Receive Upward Push Amidst Freezing Temperatures and Shipment Delays
- Journalist: Jaideep Kumar
Fundamentals of Naphtha are running bullish since the past few weeks in tandem with the inclement weather conditions and shipping delays along several trade routes across the globe. As three Naphtha steam crackers in Northeast Asia with overall Ethylene capacity of around 2.50 million tonnes are scheduled to return onstream by late January-February, its values already thriving due to favorable olefin margins are anticipated to witness further spur in the near-term. Naphtha values on 31st December reached record high to USD 102.33 per tonne in Asia, registering its highest level for more than a year, backed by strong petrochemical demand and fears of supply tightness in the coming weeks. Exports of Naphtha from US to Asia also rallied to reach 5 years high in late 2020, with expectation of a significant spike in its demand in H1 2021. Furthermore, values of Propane have marched higher than Naphtha following the delayed shipments due to extended wait times for Asia-bound cargoes along the Panama Canal and its strong heating demand in Japan, China and South Korea amidst the harsh winter season. Traders remained stressed that extended waiting times at the Panama Canal could further delay the deliveries of US shipments to Asia in January which are estimated to be around USD 3.2 million tonnes. ChemAnalyst anticipates that although the shortage of US cargoes might be overshadowed by abundant deliveries from the Middle East, but robust demand for downstream olefins is anticipated to impart a prominent shift on the overall price margins.