The Asian naphtha complex saw low trade activity at the onset of the week

Chemical Industry

The Asian naphtha complex saw low trade activity at the onset of the week, while fundamentals were largely unchanged on Tuesday. Expectations on the arbitrage cargoes for April-arrival into the Far East was lower than for March, market sources said. The East/West naphtha paper spread, however, appeared to be strengthening. According to one market source, the April-arrival naphtha arbitrage volume was earmarked around 1.2-1.4 million mt, while March-arrival volume was near 1.7 million mt. The East/West naphtha spread rebounded from a five-month low at plus $13/mt to $16.5/mt on Tuesday and was pegged slightly higher at $16.75/mt on Tuesday’s 0300 GMT trade hours. Meanwhile, the spread of Far East Index propane swap against the Mean of  Japan naphtha swap fell for the third straight session to minus $76/mt on Tuesday, a level not seen since October 25 last year at minus $76.75/mt. In other news, Japan’s Keiyo Ethylene is currently running its naphtha-fed steam cracker in Chiba at 100% capacity after completing some repair works, a company source said late Tuesday. The cracker, which is able to produce 700,000 mt/year of ethylene and 400,000 mt/year of propylene, was shut down around mid-February for for about 10 days of repairs. India’s Bharat Petroleum Corp. Ltd.’s refinery in Mumbai plans to shut down a 6 million mt/year (120,000 b/d) catalytic distillation unit during July-August for maintenance. The regular maintenance has been planned for 25 days. The refinery has two CDUs. It mainly caters to the demand for petroleum products in the western region. BPCL’s refinery has a capacity of 12 million mt/year (240,000 b/d). Brunei-based Hengyi Industries is on track for completion of its new refinery in Pulau Maura Besar this July and will begin operations by the end of 2019, according to local media reports. The final investment decision was made in March 2017, according to S&P Global  data. The plant is expected to process initially 175,000 b/d of crude and condensate. With the completion of phase 2 in 2022, the plant’s capacity is set to increase to 22 million mt/year (440,000 b/d), the report said. The refinery will deliver products to the local market and also export to China. China’s Hengyi Group owns 70% of Hengyi Industries while the Brunei government, through Damai Holdings, owns 30%.


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