Market and product

April 9 (Bloomberg) -- European naphtha exports to Asia will rise in April after slowing in March as maintenance of petrochemical plants on the continent cut demand for the feedstock and lowered prices.

At least 195,000 metric tons of naphtha, which is used to produce plastics, is set to move to Asia from northwest Europe and the Mediterranean so far, according to Millennium Chartering Pte. The total shipment for the month is estimated at between 250,000 tons and 300,000 tons, according to a survey of four Europe-based traders involved in the business.

The large shipments from Europe are “not usual,” said Ravi Narayanaswamy, an analyst with Purvin & Gertz Inc. in Singapore. “The Asian market is short and will need the naphtha from Europe.”

Sempra Energy hired the Horizon Diana to ship 55,000 tons from the Mediterranean to Japan on April 9 for $1.44 million. Vitol Group has chartered the NS Asia to send 80,000 tons from the Mediterranean to Japan on April 15, while Statoil ASA has hired the Eternal Pride to carry 60,000 tons from Norway to Japan on April 18, the report from Millennium showed. As much as 500,000 tons was shipped to Asia in January and February while almost none was shipped in March, two traders said.

According to transmissions from ships captured by AISLive on Bloomberg the Horizon Diana was last sighted off Sicily on its way to Milazzo where Agip Petroli SpA runs a 200,000 barrel- a-day refinery. The NS Asia is off the Spanish coast in the Atlantic Ocean on its way to Limassol in Cyprus, a storage terminal in the Mediterrean. The Eternal Pride is steaming out of the Atlantic to Mongstad, Norway, where Statoil operates a 189,000 barrel-a-day plant.

Japan Naphtha

In addition, Shell chartered a vessel to send 30,000 tons to Asia, according to three European based traders said. Statoil, Vitol and Sempra declined to comment. Shell was not immediately available when called.

The traders said the arbitrage worked because of savings made on freight to consumers in Europe as well as premiums to cargoes delivered to buyers in Asia.

Prices in Asia have increased 0.8 percent this year as economic growth in China, the world’s second biggest energy consumer, boosts demand for chemicals used in construction materials, plastics and synthetic fibers.

Shell Cracker

Shell started production at its new 800,000 ton-per-year ethylene plant in Singapore on March 22, according to an e- mailed statement from the company last month.

Indian Oil Corp., the country’s second-biggest refiner, may also cut exports of naphtha after commissioning a $3.2 billion plant in March. Indian Oil will use more than 2 million tons of naphtha when the cracker operates at its full capacity, said Serangulam V. Narasimhan, the company’s director of finance, on April 1. The plant will have a capacity to produce 857,000 tons of ethylene a year.

Singapore light distillates stocks, a category that includes naphtha, reformate and gasoline, were at 12 million barrels in the week ended April 7, dropping 1.9 percent from a record 12.3 million barrels last week, International Enterprise said in an e-mailed statement yesterday.

In Europe, Dow Chemical Co., the largest U.S. chemical maker said it plans to shut down a plant and steam cracker in Germany this month for its biggest-ever maintenance works.

Seven plants including the ethylene plant on the DCG site at Boehlen, Germany, will be idled for “extensive, legally required inspections,” said Sue Breach, a company spokeswoman said on March 31. The company plans to resume normal operations at the site in early June, she said. The ethylene cracker produces 540,000 tons a year.

(Source: Bloomberg, byBrian Murphy and Ann Koh)