The price spread between propylene and naphtha jumped $68.50/mt day on day to be calculated at $481.50/mt last Friday, the highest level since February 20, 2017, when the price spread was calculated at $486/mt, S&P Global Platts data showed.
A bullish propylene market in Asia pushed up the propylene-naphtha spread. Last Friday, the FOB Korea propylene price spiked $60/mt day on day to be assessed at $1,080/mt, the highest level since November 19, 2014, when the price was assessed at $1,090/mt, Platts data showed.
Meanwhile, the CFR Japan naphtha price dropped $8.50/mt to $598.50/mt over the same period.
Global tightness has been driving the Asian propylene market, according to market sources. In Asia, propylene plant shutdowns in the first quarter was tightening spot availability.
In South Korea, the Yeochun Naphtha Cracking Center plans to shut its No. 2 naphtha-fed steam cracker at Yeosu around late February for two weeks of repairs, Platts had reported. The steam cracker is able to produce 270,000 mt/year of propylene.
GS Caltex will also shut a 53,000 b/d vacuum gasoil fluid catalytic cracker at its 785,000 b/d refinery in Yeosu on February 19 for 45 days of turnaround, Platts had reported. The cracker is able to produce 250,000 mt/year of propylene.
Deepsea supplies to Asia are also limited as high US propylene prices have pushed traders to move available spot cargoes to the US. Last Friday, the US spot propylene price was assessed at 63.75 cents/b FD US, or $1,405.05/mt, Platts data showed.
Market sources said around 7,000 mt of spot cargoes from Rabigh, in Saudi Arabia, were fixed to the US last week amid the high US prices. Some market sources said traders are also trying to move spot cargoes from Asia to the US, but limited spot availability made it difficult to do so.
