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Japan - JX shuts naphtha desulphuriser, paraxylene unit [ 30 Aug, 2010]
JX Nippon Oil and Energy Corp, Japan's top refiner and a unit of JX Holdings Inc, said on Monday it shut a 39,000 barrel per day naphtha hydro desulphuriser and 200,000 tonne per year No.2 paraxylene making unit at its Chita plant after a boiler fire on Sunday.
A company spokesman said it expects to restart both units this week.
Source: Reuters
Asian naphtha cracking margins turn positive as ethylene rebounds [ 27 Aug, 2010]
Asian naphtha cracking margins entered positive territory this week the first time in three months -- driven by a sharp rebound in spot ethylene prices, Platts data showed Friday.
Late Thursday, Northeast Asian naphtha cracking margins were pegged at plus $0.5/mt, compared with minus $5/mt Wednesday. It is the first time since May 31 that the margins entered positive territory.
In Southeast Asia, the margins turned positive on Tuesday this week three days earlier than NEA -- at plus $7.9/mt, the first time since June 3. Late Thursday, the margins were pegged at plus $23.28/mt compared with plus $19.8/mt Wednesday.
Asian naphtha cracking margins are calculated based on Platts daily assessments of ethylene and naphtha. In Northeast Asia, naphtha cracker operators add $350/mt ethylene conversion costs to Platts MOPJ naphtha assessments, while Southeast Asian producers multiply 1.45 by Platts MOPJ naphtha assessments.
Asian ethylene prices started rebounding on August 16 as end-users actively started seeking spot ethylene cargoes for downstream production, especially for monoethylene glycol amid good margins. The Asian ethylene market has become more bullish this week, as multiple unplanned steam cracker outages in the area tightened the spot market.
On Thursday, Japan's Mitsui Chemicals shut its 600,000 mt/year naphtha cracker at Chiba, eastern Japan, due to a mechanical problem. In Singapore, Shell shut its 800,000 mt/year naphtha cracker on Tuesday. Shell's cracker was restarted Wednesday but the operating rates are still low, according to sources close to the company.
The unplanned shutdown of Mitsui Chemicals tightened ethylene supplies in the Chiba area, Japan. "Exports from Chiba would definitely drop because of the shutdown," said a trader. In Singapore, speculation is looming that Shell will step into the market to buy spot ethylene cargoes to maintain high MEG plant operating rates.
So far, Shell has not imported ethylene as the company has managed to buy ethylene in the domestic market, sources close to the company said. "But it is still possible that Shell will step into the market to buy spot cargoes," said a trader.
Several spot cargoes were reported to have been transacted this week. A standard-sized cargo was reported to have been sold at $1,000/mt CFR Taiwan this week, while a cargo was sold at an equivalent of $950/mt via pipeline in domestic market in Indonesia. Spot buying appetite remained strong in Taiwan and Indonesia as of Friday.
As of early Friday, Northeast Asian ethylene prices were pegged at $1,011/mt CFR NEA, marking a $26/mt, or 2.6% price increase from Monday, while Southeast Asian ethylene prices rose $31/mt, or 3.2%, from Monday to $981/mt CFR SEA.
Some market sources said the upside in the Asian ethylene market would be capped soon amid quickly-rising spot supplies from the Middle East, especially from Iran.
According to a shipping report, eight spot cargoes, amounting 36,600 mt, are fixed to be loaded by Iranian trading house Petrochemical Commercial Co. between the end of August and early September. The total amount of 36,600 mt is equivalent of 10 standard-sized cargoes in Asia. But so far, the destination of the cargoes is still unclear.
Until the last week, all Iranian cargoes moved to Europe, where spot
ethylene prices are pegged higher than Asia. European spot ethylene prices
were assessed at $1,035/mt CIF Northwest Europe Thursday, according to Platts
data. But it is getting more and more attractive for traders to move Iranian
cargoes to Asia as the location spread between Europe and Asia is quickly
narrowing.
Source: Platts
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