Naphtha Methodology
Naphtha is a light product of crude oil refining mostly used as either feedstock for petrochemical cracking or gasoline reforming and blending. With the development in technologies, naphtha can also be produced from condensate splitting and gas-to-liquid processing.
In general, there are two main classes of naphtha – paraffinic naphtha and heavy naphtha. Paraffinic naphtha is rich in olefins and is suitable for olefin/polyolefin production. Heavy naphtha is mainly used for aromatic production and gasoline reforming. There are three main grades for paraffinic naphtha: light grade naphtha, full-range grade and open-spec grade.
ICIS pricing quotes naphtha Europe, Asia-Pacific and the US Gulf.
Frequency:
- Naphtha published weekly on Friday in all three regions.
- Published daily in Europe* and the US Gulf*
- Real time Price Alert Service (PAS) delivering market news and trends throughout the day.
* FOR DETAILS SEE GASOLINE/NAPHTHA/CRUDE/MTBE ENTRY UNDER “CRUDE & PRODUCTS” SECTION
Naphtha (EUROPE)
Weekly Price Assessments:
Naphtha Spot Prices
- CIF NWE* (USD/MT & conversion to US CTS/GAL)
- CIF NWE+ (USD/MT & conversion to US CTS/GAL)
- FOB BARGES ARA** (USD/MT & conversion to US CTS/GAL)
- CIF CARGOES MED+ (USD/MT & conversion to US CTS/GAL)
- FOB CARGOES MED+ (USD/MT & conversion to US CTS/GAL)
Naphtha Front Month Swaps Price
- CIF NWE (USD/MT & conversion to US CTS/GAL)
* Friday close assessment **Monday close assessment + Assessment on full week
Naphtha (US GULF)
Naphtha (N+A) finds its primary use in the US as a blending component of gasoline on account of its high octane rating. Paraffinic naphtha is used as a feedstock in the petrochemical industry (i.e. ethylene).
Weekly Price Assessments:
Naphtha Spot Prices
- DEL USG (N+A) (US CTS/GAL & conversion to USD/MT)
- DEL USG (Paraffinic) (USD/MT)
Naphtha (ASIA-PACIFIC)
Weekly Price Assessments:
Naphtha Spot Prices
- CFR JAPAN (*) (USD/MT & conversion to US CTS/GAL)
- CFR JAPAN (+) (USD/MT & conversion to US CTS/GAL)
- FOB SINGAPORE (USD/MT & conversion to US CTS/GAL)
Note: (+) Price range for the week
(*) Price range at close of business Friday
General Information:
Assessment window:
Price assessments are based on information supplied by market participants through the week up to close of business on Fridays at 1700 hours in London, Singapore and Houston.
Specification:
European naphtha assessments are based on open-specification naphtha with a typical density of 0.735 at 15ºC and a minimum paraffins content of 65 pct. In the US Gulf, the N+A quote is for a minimum 40 N+A/150 IBP (initial boiling point). The minimum initial boiling point (IBP)serves to focus the quote on heavy rather than full range material.
The product specification for Asian open-spec grade naphtha (minimum 65 percent paraffinic content) used in this report is:
| Property | Test | Specification |
| Specific Gravity |
at 60F |
0.65-0.74 |
| Colour |
Saybolt |
min +20 |
| R.V.P. |
PSI |
max 13 |
| Sulphur |
ppm |
max 650 |
| Paraffins |
vol % |
min 650 |
| Mercury |
ppb |
max 1
|
| Oxygenates |
ppm |
max 50 |
Timing:
Cargoes loading or delivered four-weeks forward from the date of publication. The delivery window in Asia is up to 6 weeks after business conclusion for the CFR Japan quote, taking into consideration Indian and Middle East imports to East Asia. Deals settled during the week of reporting will be taken as benchmarks for price assessments of that particular week.
Terms:
30-60 days after bill of loading date.
Standard cargo size:
In Europe, the standard cargo size is 12,000-12,500 tonnes. For the FOB RDAM export quote, it is 500-1000 tonnes. For FD NWE it is 20-25 tonnes on a truck-delivered basis. In the US Gulf, all quotes refer to waterborne volumes of at least 10,000 bbl. In Asia, quotes take into account minimum cargoes of 25,000 tonnes.
Assessment Basis:
European naphtha physical spot prices are assessed based largely on transactions and discussions which take place daily between 15.30 and 16.30 hours GMT/BST, but discussions and business occurring outside the window is also incorporated into the final price assessment. In the weekly report, quotes include weekly ranges (+) for CIF CARGOES NWE and CIF / FOB CARGOES MED, the CIF CARGO NWE price spread at close of business on Friday (*), and Monday’s price range (**) for FOB BARGES ARA. Monday and Friday prices are compared with the ranges seen the previous Friday.
Some assessments are the product of calculation alone, for example in markets where insufficient market activity takes place to permit price assessment, or where a market habitually itself sets prices according to a formula. Price ranges for FOB barges ARA, FOB cargoes Med and CIF cargoes Med are calculated as a differential to the CIF Cargoes NWE assessment.
Price assessments in the Naphtha Weekly (Asia Pacific) report are based on price movements of open-spec grade naphtha, which is the most actively traded grade in Asia.
Asian spot naphtha prices are strongly correlated to crude oil prices. The supply/demand balance is reflected in the premium or discounts over the CFR Japan quote, mentioned in the text. In the weekly report, there are two types of prices – CFR Japan price and FOB Singapore, which reflect the price for that trading day for open specification grades.
Daily Asian prices are also reflected by CFR Japan and FOB Singapore quotes, dominated by Japanese spot prices, which is quoted in two-week blocks. ICIS pricing publishes quotes six weeks in advance of the current reporting dates. For example, if the publishing date is 16 January, quotes would be for the second half March and first half April. When it becomes 1 February, quotes would be for first half April and second half April. The FOB Singapore prices are generally CFR Japan minus freight differential. The benchmark normally used is for freight rates for medium range vessels between Singapore and Chiba, Japan.
The price spread for the week is shown in reports as (+) and represents deals done and the best bid/offer where appropriate based on market fundamentals. On the infrequent occasions when there are insufficient deals in the week to establish a representative weekly range and relying on deals alone does not reflect the market fairly and objectively for the week, ICIS pricing reserves the right to make an editorial judgment based on a combination of: the correlation between the current month and forward month; and bids and offers for that month. In Singapore, the price spread at Friday close is shown as (*) and represents the deals done and bid/sell range at the Friday deadline at 1730 hours Singapore time.
In the US, naphtha prices focus on spot numbers due to the fact that the product values fluctuate in tandem to unleaded gasoline prices. Trades generally involve transport of material via barge or pipeline, and is focused on heavy rather than full-range N+A material. Paraffinic naphtha is also quoted on a spot basis.
All regional reports offer market commentary that includes details of traced transactions, news on the supply/demand balance, export/import information, and the contract price.
1 November 2012