Singapore—A downturn in Asian naphtha prices, in line with crude, lifted the butadiene-naphtha price spread and pushed it to a five-week high, S&P Global Platts data showed.
CFR China butadiene price was assessed unchanged day on day at $1,005/mt on May 20, while CFR Japan naphtha price fell $3.00/mt day on day to $590.50/mt, according to Platts data.As a result, the spread between CFR China butadiene and CFR Japan naphtha physical rose to $414.50/mt at the Asian close May 20. The spread was last seen higher on April 15, when it was at $453/mt, Platts data showed.
The typical breakeven spread is $300/mt, and the butadiene-naphtha spread has been above $250/mt since Feb. 19.
Market sources said Asian naphtha market would be firm for the near-term, in line with the planned start up of new naphtha-fed steam crackers in South Korea.
The price spread would unlikely increase further due to limited near-term price increase in Asia butadiene, sources added.
Butadiene price rise may be limitedAsian butadiene market sentiment is firm at present with limited underlying spot availability after two cargoes were fixed for the US from Asia.
However, some market sources said the price increase in the Asia butadiene may be limited amid increasing supplies from China, as China has been accelerating butadiene exports in line with rising production capacities.
An arbitrage window from Asia to the Americas is currently open and a 10,000-mt cargo is heard to have been fixed for the US and Mexico for June loading.
Typically, China's butadiene exports move to South Korea. According to the latest statistics by Korea Customs, South Korea's butadiene imports from China stood at 31,738 mt for January to April, more than 10 times compared to 1,911 mt a year earlier.
South Korea's butadiene imports for January-April this year are already higher than the imports in 2020 at 25,232 mt, the data showed.
Market sources said Chinese butadiene makers would continue to export for now, in line with planned capacity expansions in the second half of this year.
China's Zhejiang Petrochemical is due to start its new 200,000 mt/year butadiene plant in Zhejiang soon, according to market sources.
