Naphtha demand in NW Europe slows as petrochem, gasoline blenders wait in the sidelines

16-Aug-12
The Northwest Europe naphtha market is experiencing slow demand as petrochemicals and gasoline blenders remain on the sidelines, leaving buyers and sellers in a deadlock, as per Platts. Although petrochemicals have reportedly been buying "a bit of volume" due to rising propane prices, they are not expected to buy significant quantities of naphtha until September. Propane is naphtha's competitive feedstock in petrochemical cracking. As per a trader, petrochemical players are bidding at lower figures and testing to see if the CIF NWE naphtha price weakens. The CIF NWE naphtha price has hovered around US$930/mt since last Thursday, while the front month crack swap has remained between minus US$6-8/barrel since last Wednesday, levels not seen since April, Platts data show. Additionally, the market is awaiting a pick up in gasoline blending demand for a West African program expected to pull gasoline in September. Naphtha is an ideal component for the specification as it is low octane. However, so far any demand in advance of the export program is being covered by gasoline already in tank.
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