Asia’s naphtha prices and refining margins rebounded to their highest in about seven years thanks to robust demand from the petrochemical producers, which switched feedstock as LPG prices surged amid a global energy crunch. LPG prices from the Middle East, Europe, and the US have hit their highest since 2014, recently driven by economic recovery and a global power crisis. This prompted Asian ethylene cracker operators to import more naphtha.
Asia’s benchmark naphtha prices have climbed 30% since August 20 to $795 per ton on October 18, the highest since 2014. Meanwhile, refiners’ margins for producing naphtha from Brent crude grade also hit their highest since 2014 at $152.78 per ton.
Global naphtha demand has surpassed pre-pandemic levels this year by about 400,000 bpd, the International Energy Agency said. Asia, the world’s top naphtha consumer and importer is expected to see a wider supply deficit as about 2.05 million tons/year of additional ethylene capacity are expected to come online through March 2022. Analysts said the region’s naphtha imports were expected to rise by 2% next year.
