The European physical naphtha market and forward spreads have come under heavy pressure in recent days as weak LPG values have led some petrochemical end-users to turn their attentions to cracking propane, as per Platts.
Platts assessed CIF Northwest European naphtha cargoes at US$944.25/mt on Thursday, US$7.75/mt lower from Wednesday, but the most significant, recent move has been the declining premium of physical cargoes to January CIF NWE swap values. On December 27, Platts assessed CIF NWE cargoes at US$960.75/mt, representing a premium of US$13.50/mt to January CIF NWE swaps. The physical premium to January CIF NWE swaps was assessed Thursday at just $2/mt, while the January/February CIF NWE spread has also contracted substantially during the same period.
Traders have attributed the weaker complex largely to increased petrochemical end-user buying interest for propane, as unseasonably warm weather has meant heating demand for the fuel has been far less than anticipated.
07-Jan-13 
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