Demand from petrochem sector for naphtha weakens

Demand from the petrochemicals sector for European naphtha weakened at the end of last week, as end-users are well covered until August amid a falloff in buying further downstream, as per Platts. In the downstream markets, polyethylene demand was subdued as converters remained "hand to mouth" on inventory, anticipating a further fall in prices. The first 10 days of July are balanced, but more naphtha cargoes are expected on offer in the second half of the month. Northwest European naphtha cargoes were assessed Thursday at US$929.25/mt, rising by thirty dollars in the week. Downstream demand is not too healthy, and spot ethylene is weak compared to contract price, so buyers are minimizing contract volumes. As a result producers are stockpiling their output, and are not interested in wanting to run their stocks higher, resulting in reduced production rates. July contract price for ethylene was fully settled at €1,090/mt FD NWE, falling by € 95/mt on June. Meanwhile, the ethylene spot price was assessed at €895/mt FD NWE Thursday.
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