The market is extremely weak. Swaps side, we have seen a slowdown of at least 20%, said a Singapore-based naphtha broker, referring to a drop in naphtha paper trades compared with September volumes.
Asian naphtha prices more than halved its value from early August on Thursday when cargoes for first half December loading were pegged at $443.50-444.50/tonne (?28.19-328.93/tonne) CFR (cost and freight) Japan by global chemical market intelligence service, ICIS pricing.
A 25,000 tonne deal for second half December loading was also heard done at $464/tonne CFR Japan a level not seen since August 2005 when crude values were still hovering within the $60-$70/bbl range.
As at 11:30 hours local time (03:30 GMT), November NYMEX light sweet crude futures were traded at $72.81/bbl while Brent on London s ICE futures was at $70.25/bbl.
The steep falls seen in naphtha had raised expectation among Asian importers that polyolefins prices would weaken further as regional cracker operators mull further production cuts due to persistent weak derivative demand.
The credit crunch in the US and Europe had stoked fears of a global recession, and exports from Asia were expected to take a hit, leading to further cutbacks in production and raw material purchases, including for petrochemical products.
With naphtha prices below $500/tonne CFR Asia, naphtha-based polyolefins producers could break even at about $900/tonne CFR China and southeast Asia, an Asian polypropylene (PP) producer said.
However, polyolefins offers at such low levels were not heard in the market yet, the producer added.
Ethylene spot prices looked set to drop further amid talks of deals done below the $800/tonne CFR northeast Asia level during the week.
My customers thought prices would soon reach bottom but this week naphtha dropped further, so now they feel C2 (ethylene) has room to drop more, said a Japan-based olefins trader.
The aromatics cluster was also not spared as prices fell across the board on the back of plummeting feedstock naphtha values.
The Asian benzene market was tossed into a state of chaos as prices tumbled $140/tonne from last Friday, extending losses to more than $300/tonne within two weeks and bringing prices to levels not seen since March 2006
Benzene prices were assessed at $670-680/tonne FOB (free on board) Korea at Thursday s close.
In the toluene market, similar chaos and panic prevailed among sellers and buyers as they were not sure where the market would hit bottom after toppling by $110/tonne from last Friday.
Toulene prices were assessed at $610-620/tonne FOB Korea on Thursday.
Meanwhile, para-xylene (PX) discussions levels fell $100/tonne towards $810-820/tonne CFR Taiwan on Thursday while trading remained highly subdued in Friday s morning session.
