Naphtha Prices Rise On Gulf Tension

Singapores physical naphtha prices leapt 50 cents on Monday to just below $21.00 per barrel on a free-on-board (fob) basis, the highest level seen in at least two years.

Traders said overnight hikes in crude and market jitters over the Iraqi crisis were likely to push levels even higher. I cannot put a ceiling on prices, said a Japanese trader. Although naphthas situation is quite tight, prices depend on what happens on crude.

Japans forward naphtha contract, the open-specification contract for first-half Nov, the main trading period, was notionally quoted at $200/$201 per tonne yesterdaay morning, the highest since late April.

 

Traders said petrochemical firms, which buy naphtha as feedstock, were expected to back off if prices stayed over $200 because it was almost impossible for them to make profits with naphtha costing more than that.