Royal Dutch Shell's ethylene demand to feed a new Singapore petrochemical plant will sustain the strong feedstock market through the first quarter until its cracking facility comes online, traders said. Naphtha demand will also be supported at least through March, extending the rally since November, as petrochemical makers in Asia rushed to replenish inventories of the feedstock used for making ethylene. This is to cash in on China's strong demand for plastics, as its economy recorded a 7.7% y-o-y growth in the first three quarters on 2009, which may still be revised upwards, despite the global slowdown.
Shell launched its 750,000 tpy mono-ethylene glycol (MEG) plant on Jurong Island on Dec. 12, prompting it to import regional ethylene in the interim, as its 800,000-tpy cracker is not expected to start till February or March, traders said.