This will change as supplies from Saudi Aramco are expected to fall although this could not be independently confirmed and buyers may need to plug the supply gap with spot cargoes, industry sources said. Naphtha is the key feedstock for crackers in Asia although makers can replace a small portion of the fuel with alternative liquefied petroleum gas (LPG).
But even LPG supplies from Saudi, which sets the contract prices of butane and propane could also be affected as Saudi Aramco has already delayed announcing its October LPG nominations to September 18 from September 16. Operations at Saudi Arabia's SASREF and PetroRabigh oil and petrochemical refineries have been slashed by up to 40% following the attacks over the weekend which had halved the kingdom's production.
Japan's August output of ethylene, made predominantly from naphtha, was at a five-month high of 551.2 million tonnes, data from the Ministry of Economy, Trade and Industry showed.
Japan, which is short of naphtha, imported around 1.14 million tonnes of the fuel in July, making that its highest monthly import since May, the government data showed.
South Korea's Hanwha Total Petrochemical has completed the expansion of its naphtha cracker to 1.4 million tonnes per year (tpy), up by about 30%, and commercial operations have started, the company said on Tuesday.