Ethylene-naphtha spread hits an-all-time high in Asia

15-Apr-15

The spread between ethylene and naphtha has been rising since early February, hitting an all-time-high since ChemOrbis started making records. Spot naphtha prices have been following a mostly steady trend in a narrow range for over 2 months after having jumped back up from the low US$400s/ton at the beginning of the year. On the contrary, tightness concerns have been pulling ethylene prices higher on a regular basis, causing the gap between the two products to hit a record-high. Recent production issues have triggered the supply constraints amid plant shutdowns. Spot naphtha market has been mostly following the pattern of the crude oil markets, which have been quite volatile in the past few months. A supply glut and weak economic data from China continue to weigh down on the energy complex whereas a potential demand pick-up and occasional geopolitical tensions pull prices higher from time to time. The graph below displays the spot ethylene market’s defiance of the crude oil and naphtha trends.