Media: Russian naphtha regains popularity in the South Korean market

South Korean petrochemical producers have resumed taking in Russian naphtha after about a year of overlooking these cargoes following the Russia-Ukraine war complications, according to a Bloomberg report. Though South Korea does not have sanctions on Russian naphtha, a number of plants here are linked to US and European entities, who opted to keep their distance from this source of supply.  

The report added that South Korea imported nearly 63,000 barrels of naphtha from Russia in May directly or via commercial hubs such as Singapore. The figure showed a substantial jump from zero quantity in March 2023 but was still way below the pre-Ukraine war levels.

South Korea is among the latest Asian nation to jump on the wagon to take advantage of cheap Russian fuel. Sources expected the competitive naphtha to enable petrochemical plants here to restore normal operating rates after a prolonged period of squeezed margins.

At least one petchem producer has expressed the intention to bring forward the restart date at their PP and PE plants in Daesan to June from the initial schedule in July, citing the improving operating margins. This indicates a possibility of a similar move by other South Korean producers moving forward, especially with the advantage of cheaper feeds.