Demand for naphtha in Northwest Europe waned slightly towards the end of the week with petrochemical end-users well covered over the next few weeks, according to sources, further easing supply pressures. Recent demand for naphtha has been driven by petrochemical end-users, as per Platts. "Crackers around Europe are focused on open spec," a trader said. "There is not much open spec trading right now. Petchems have forward bought to be covered...demand is slower." End-users have opted to crack naphtha instead of alternative feedstocks such as propane due to high LPG prices.
"Propane is extremely strong at the moment...[that] should be encouraging [petchem] feedstock switching," a second trader said. Strong demand, however, left the market tight on supply in recent weeks as market participants struggled to come across offers for open spec naphtha. "Things looked expensive. [But now] some [open spec] is on offer," a third source said. Offers have been heard in the Baltic, Mediterranean and Northwest Europe, according to sources. Low premiums have also prompted slower selling activity. Premiums were up to US$2.50/mt Friday, having been around US$1.50-2/mt Thursday, according to sources.
"No one is short at the moment. Material is around but nobody is really selling," said a forth source.