European liquefied petroleum gas (LPG) firm Petredec has exited the liquids and petrochemicals business to focus on its core strengths in LPG, its senior management said.

When asked about its naphtha and petrochemicals trading status in Asia, the management said: “Petredec has recently, in an effort to focus on its core strengths, discontinued the trade of Liquids and Petrochemicals. The company remains fully dedicated to the trade, transport, and distribution of Liquefied Petroleum Gas.”

In 2016, Petredec expanded its trading operations beyond LPG to include naphtha by hiring a veteran trader to join its Singapore team.

Naphtha is a key feedstock used in naphtha crackers for making petrochemicals such as ethylene, which is a main building block for
plastics.

LPG on the other hand can partially replace naphtha in most Asian crackers, depending on the prices of the two fuels. Since 2008, several commodity firms including Mercuria, Castleton Commodities International (CCI), Clearsource, MRI Trading and Zenrock Group have begun trading naphtha as Asia is structurally short of the fuel. But abundant naphtha and petrochemical supplies have caused prices to fall steeply this year.

Asia’s naphtha physical crack – the premium or loss for refining a barrel of Brent crude into the fuel – for instance turned negative for the first time in a decade in June this year.