Strong petrochemical margins are supporting naphtha markets in Asia-Pacific and beyond,although upcoming cracker maintenance will depress demand. Petrochemical firms are operating cracking plants at or near capacity in Asia-Pacific amid attractive downstream margins.Ethylene’s premium to naphtha has risen above$550/t in northeast Asia for the first time since January,reinforcing a trend that has seen ethylene margins nearly double this year compared with 2012(see graph,below). Strong petrochemical sector demand has coincided with a spate of unex-pected refinery shutdowns,boosting Singapore naphtha to a discount of less than $2/bl to light sweet crude in the second half of July.A fire shut HPCL’s 180,000 b/d Bhatinda refinery in India on 20 June,triggering a gasoline buying spree and supporting naphtha prices(AGM,4 July,p7).The shutdown has trimmed Indian naphtha exports,which are likely to fall below 130,000 b/d in August,the lowest since at least the start of last year.And Malaysian Petronas’100,000 b/d Malacca refinery suffered electrical problems in mid-June.The firm has been buying spot gasoline since then,supporting demand to reform naphtha.
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