Saudi Arabia and UAE hike naphtha to record levels

24 May 2012

Largest exporter to Asia, Saudi Aramco, raises prices to $25-33 a tonne above formula levels

Gulf oil majors Saudi Aramco and Abu Dhabi National Oil Company (Adnoc) have hiked export prices for the petrochemicals feedstock naphtha to record levels.

Saudi Aramco, the largest exporter of naphtha to Asia, raised prices to a range of $25-33 a tonne above its usual price formula for the second half of 2012 for a 25-74 per cent premium, traders told Reuters.

At the same time, Adnoc offered naphtha grades at $28-29.50 a tonne above its formula, with offers for July 2012 to June 2013 raised to a 20-37 per cent premium over previous annual contracts.

Naphtha is the main form of feedstock used in crackers by petrochemicals producers in Asia and Europe, with Gulf crackers largely using ethane gas.

Asian buyers are reported to be disappointed in the Gulf price hikes, as demand for naphtha is falling on lower petrochemicals margins.

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