Asia and Middle East Naphtha Market Commentary

The Asian naphtha market took a breather on Friday as activities toned down ahead of the public holidays for the next two days. Supply-led factors such as heavy turnarounds in the Middle East and bad weather conditions in the West continued to lend support to the Asian naphtha complex, sources said. Earlier, key naphtha supplier Abu Dhabi National Oil Co., or ADNOC is shutting the two condensate splitters at its 840,000 b/d Ruwais refinery for maintenance over mid-January to early March. Under the turnaround plan, one splitter will be taken offline in mid-January for three weeks. Following its restart, the second splitter will be shut for three weeks. Last Friday, petrochemical producers Asahi Kasei Mitsubishi Chemical Ethylene Corp. and LG Chem bought open-spec naphtha for second-half March delivery. Asahi Kasei Mitsubishi Chemical Ethylene Corp. paid a premium of around $12/mt to the Mean of CSG Japan naphtha assessments on a CFR basis to Mizushima, pricing 30 days prior to delivery, and LG Chem bought its minimum 70% paraffinic naphtha supply for delivery to Yeosu at a premium in the low teens to MOPJ naphtha assessments, CFR, pricing 30 days prior to delivery. A day before, JG Summit Petrochemical Corp., in the Philippines bought around 25,000 mt of naphtha with a minimum 70% paraffin content for delivery to Batangas in H1 March at a high single-digit premium to the MOPJ naphtha assessments, CFR, pricing 30 days before delivery. In other news, the 230,000 b/d Duqm refinery project in Oman was expected to start up in 2022, a senior official from the Port Duqm Company SAOC said Friday. The refinery was expected process medium and light crude from Kuwait and Oman, according to Erwin Mortelmans, commercial director of Port Duqm Company SAOC. It will focus on producing refined products such as diesel, jet fuel, naphtha and refrigerated LPG, he said, speaking at the CSG Middle Distillate conference in Antwerp. In China, Zhejiang Petrochemical has started trial operations on Friday on one of its 200,000b/d crude distillation unit at the phase I project, a source close to the company said Friday. The refinery has put feedstock into its crude distillation unit on January 31, according to the source. The plant’s location means it can supply locally to the Yangtze River Delta region, China’s consumption center, as well as ship to northern and southern China and export overseas.

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