TOKYO -- Prices of petrochemical products are on the way up in Asia as crude oil gets costlier amid the ongoing instability in Iraq.
Naphtha, made by refining and distilling crude oil, is being traded for around $990 per ton in the Asian spot market, the highest in six months and up 6% or so from the start of June, when tensions in Iraq heightened.
Polyethylene, a synthetic resin made from naphtha, has jumped up as well, as traders and large-lot users rush to secure supplies ahead of a further run-up in price. The low-density variety, used in packaging films, is hovering at around $1,610 per ton, the highest in four months, while the high-density variety, used in plastic bags, has climbed 2% in a month.
The price of benzene, extracted from naphtha, has increased 7% in a month to $1,370 to $1,380 a ton. The U.S. is stepping up imports of benzene because a boom in shale gas production has resulted in increased use of ethane and liquefied natural gas as an olefins feedstock instead of naphtha, causing the domestic benzene supply to decrease.
Phenol, used to make high-performance resin, has risen 5% from late May to $1,520 per ton in the East Asian spot market. With producers in Japan, China, South Korea and elsewhere putting their equipment through routine maintenance, supply has fallen off.
If naphtha prices climb above $1,000 per ton, Japan's resin prices may get pushed up, according to an official at plastics producer SunAllomer. Resin prices in Japan are set based on the import price of naphtha.