Naphtha and crude shipments into Japan could be diverted or asked to hold back with some refineries and crackers seeing a shutdown as well as ports on the northeastern coast closed for operations, shipping sources said Monday.
"Many petrochemical plants have shut. They can't receive naphtha cargoes. A lot of vessels loaded with naphtha are in an uncertain situation," a source with a Japanese shipowner said.
Ports in Tokyo Bay such as Chiba and Yokkaichi are open though some terminals are still shut, the sources said.
Among those still shut are Kashima and Sendai, key ports for crude and naphtha deliveries.
A naphtha trading and chartering source with a Japanese trading house said that there was a "possibility" that naphtha cargoes heading into Japan could be diverted or held back.
A source with a clean tanker shipowner said that five-six Long Range II tankers were being asked to stand by before discharging their naphtha cargoes. "We have a vessel that is heading to Japan. It will keep proceeding till we are told by the charters to hold back. The petrochemical plants are still assessing the impact of the damages from the earthquake," the source said.
NAPHTHA CARGOES COULD BE DIVERTED
Some of the naphtha shipments could be diverted to South Korea if the turnarounds scheduled for April and May are postponed because of the situation in Japan, the source said. If the South Koreans can't take the extra naphtha, the ships may head to Taiwan, he added.
Some naphtha market sources, however, said no diversions had been heard as of Monday morning. "We're still gathering information at the moment but we have two ships to deliver into Chiba tomorrow [Tuesday]," one trader said.
"We're now checking the situation but so far we haven't heard any force majeure so it looks like it may be business as usual," he added.
Another source said vessel diversion depended on the status of the port where cargoes were to be unloaded, saying that some had been completely destroyed.
"Chiba looks okay but Kashima is not too good," the source said.
Naphtha industry participants Monday largely said the earthquake would have a bearish impact on the market.
"If domestic naphtha production is down and crackers are still running, then Japan may need to import more naphtha," a source said, adding that the production of petrochemical products would be particularly needed to aid in the reconstruction efforts.
At the Asian close Friday, the benchmark CFR Japan outright price finished the day weaker at $985/mt, down $24.75/mt from Thursday, while the first-half May naphtha crack against May Brent futures closed down $9.60/mt at $133.85/mt.
A Japanese VLCC broker said crude cargoes might be diverted Monday.
TEPCO SAYS NO REPORT OF PROBLEMS WITH LNG TERMINALS
A spokesman for Tokyo Electric Power Company said Monday that as yet he had no information on the status of its LNG import terminals but was unaware of any problems.
The Tokyo Bay area also includes several major LNG import terminals, including Tepco's 16 million mt/year (equivalent to 2 Bcf/d of gas) Futsu terminal, its 14.7 million mt/year Higashi Ogishima terminal and its 10 million mt/year Sodegaura terminal.
Meanwhile, Radio Television Brunei reported a statement from Brunei Gas Carriers saying that two LNG tankers owned by Brunei Shell Tankers had been in Tokyo Bay and Osaka Bay when the tsunami hit Japan but were safe.
"As a precautionary measure, the LNG tankers have proceeded to a safe anchorage position," the ship-owner was reported as saying.
