The weekly ICIS Naphtha price reports are covered by local reporters in Asia, Europe and the US. News within the report can include, when applicable, Brent crude-naphtha crack spreads, arbitrage opportunities, upstream news, production issues, cracker margins and refinery reports along side the up-to-the minute pricing information. Use the report to find out which different factors are driving prices before making vital business decisions.
Updated to Q4 2019
Reduced supply of naphtha cargo flows from the Middle East boosted the market during most of the fourth quarter, while tracking volatile crude oil futures. Steps earlier to plug any supply shortfalls ever since the attacks at oil fields in Saudi Arabia in September kept market fundamentals firm. Naphtha spot cargoes fetched strong premiums in northeast Asia, as well as cargoes exported out of India. The product’s crack spread to ICE Brent crude oil futures or refining margin strengthened.
Demand for naphtha in northeast Asia for petrochemicals production was steady, helping to absorb supply during the fourth quarter. However, northeast Asian producers forked out high spot premiums for cargo purchases while grappling with squeezed margins. Downstream cracker expansions in part also helped to support the feedstock’s demand. Asia naphtha’s market structure held in a wide backwardation, where prompt-month prices are higher than forward months, mirroring the firm market fundamentals.
Length in the European naphtha market recorded prior to the fourth quarter eased after the attacks on Saudi Arabia crude oil facilities towards the close of the third quarter and on strong Asian demand. The widening arbitrage window from Asia and greater volatility in the upstream Brent crude values supported upswing in European naphtha open-specification prices. Meanwhile, increased consumption rates in the US limited imports into Europe, particularly in December, lending upward push to outright naphtha prices.
Fundamentals in the European naphtha market were buoyed by interim shortage caused due to Saudi attacks which subdued the impact of slowing demand from the petrochemical feedstock and gasoline blending sectors. Continued length in the downstream ethylene and propylene sectors saw reduced consumption in the downstream markets. That said, length in the European market was largely absorbed by improved demand from Asia facing dearth of supply in the absence of consistent Saudi supply.
We offer the following regional Naphtha analysis and news coverage to keep you informed of factors and developments affecting prices in the Naphtha marketplace.
News & analysis
ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
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Commentary shows the latest market movement and weekly prices, it is a very fast moving market with lots of factors influencing supply and demand and therefore the price.
Naphtha is a light flammable liquid containing a mixture of hydrocarbon molecules typically with between 5 and 10 carbon atoms. It mainly consists of straight chain alkanes (paraffins) but it may also contain cyclohexanes (naphthenes) and aromatics.
Naphtha is produced primarily from the distillation of crude oil and is the intermediate product between the light gases and the heavier kerosene. It can also be a component of natural gas condensates, the liquid hydrocarbons contained in natural gas.
There are a number of different classes of naphtha and similar naphtha types may be called by different names. Light naphtha will normally have a higher content of straight chain paraffins and is sometimes referred to as paraffinic naphtha or straight run gasoline. Heavy naphtha usually contains more naphthalenes and aromatics and may be called N&A naphtha.
In the petrochemical industry, naphtha is an important feedstock for steam crackers in the manufacture of olefins (ethylene, propylene, butadiene) and aromatics (benzene, toluene, xylene). Paraffinic naphthas are preferred for steam crackers but heavier naphthas can also be used.
Light naphtha can also be used in industrial solvents and cleaning fluids. Applications include varnishes and paints, shoe polish, lighter fluid and fuel for portable stoves and lanterns.
Naphtha is also used to make high octane gasoline using a catalytic reforming process. This process converts heavy, low octane naphtha into high octane products.
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