The European naphtha market continues to face growing oversupply and a lack of opportunities to relieve high stock pressure as demand remains muted and outbound arbitrages closed, as per ICIS. Few changes are expected in the coming weeks, as Europe is still not showing any demand from petchems or blenders. Currently the physical market has no support.
On Friday a broker said: “There are weak cracker [run] rates, refineries have returned from maintenance [increasing supplies], gasoline is weak [reducing the incentive to purchase naphtha for blending]. The [naphtha] market is fundamentally weak.” Exacerbating the paucity of demand for naphtha is this week’s steep fall in prices for rival feedstock liquefied petroleum gas (LPG).
Propane was priced significantly above naphtha for several weeks, rendering naphtha the feedstock of choice for petrochemical buyers. By the end of last week, propane stood US$100/ton (€76/ton) above naphtha.
17-Dec-12 
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