- Low buying activity for steam crackers- Current margins make olefins nonsustainable



According to market sources, there were few
new trades in the Asia naphtha marketplace on Aug. 18, despite little buying
activity from naphtha-fed steam crackers. Current margins for making olefins
have turned loss-making and there was not much buying activity. At the Asian close on Aug.
17, the key spread between CFR Northeast Asia Ethylene and CFR Japan Naphtha
Physical, closely monitored by petrochemical manufacturers, was $160.50-180.50/mt,
up 25 cents/mt over the previous week. Industry
sources stated that the spread is below $250-270/mt minimum breakeven for
integrated producers since May 13. This makes it unsustainable for naphtha
production. The typical breakeven spread for integrated producers is $250-270/mt,
and $350-370/mt in non-integrated producers. The CFR Japan naphtha physical cracked against front-month
ICE...