Thai Oil CEO says China will drive naphtha pricing

China, as Asia’s leading petrochemical producer, accounts for half of the region’s new petrochemical capacity and will eventually overtake Japan as a major naphtha buyer, which will reduce the relevancy of the current Japan naphtha cost-and-freight price benchmark, Thai Oil PCL Chief Executive Surong Bulakul told Dow Jones Newswires. China can also take the lead in the “construction of a derivatives market” for petrochemicals in Asia, he said. Thai Oil, an integrated refiner that also produces aromatics, is looking for instruments to hedge paraxylene with crude, Surong said. The company expects demand for aromatics to stay strong this year as consumption of end products–electronics, automobiles, consumables, textile–will grow with the economic recovery. (January 29, 2010)