Recovering Chinese Petrochemical Sector Raises Naphtha Prices

Recovering Chinese Petrochemical Sector Raises Naphtha Prices

Recovering Chinese Petrochemical Sector Raises Naphtha Prices

  • 18-Jan-2023 7:27 PM
  • Journalist: Kim Chul Son

Naphtha prices in the Asian markets have been rising drastically since the beginning of 2023, and traders reported that the current trend is largely driven by the demand recovery of the downstream petrochemical sector in China. The declining flow rate of upstream crude oil from the Russian market to the Chinese market further abetted the price rise of Naphtha in China.

In the week leading up to Thursday, gasoline inventories at the ARA hub decreased by 4% to 1.367 million tonnes, while Naphtha inventories increased to 380,000 tonnes from 307,000 tonnes. According to trade sources and a local consultancy, China's Panjin Haoye Chemical Co. Ltd. has shut down its entire oil refinery and petrochemical complex following a Sunday explosion that killed two people and left 12 others missing. In December, the plant processed 460,000 tonnes of crude oil, so this shutdown further raised the demand for Naphtha in the Chinese market.

Despite the international crude oil prices dropping last week causing, local refining Naphtha's cost support is poor. The rising amount of terminal downstream ethylene must be replenished before the festival, and local refining is witnessing demand hikes as the restrictions are easing in the domestic market. As a result, the price of locally refined Naphtha increased.

According to ChemAnalyst, the cost of Naphtha is likely to continue the rising trend for the neat further due to the above-mentioned reasons. However, for the longest time range, the United States and other major developed economies will experience a recession, lowering fuel demand and putting pressure on oil prices. The local aviation sector is frustrated since the American winter snowfall weather is still present. In addition, the snowstorms in many places reduced North America's capacity to process crude oil, which led to an accumulation of crude oil and a subsequent drop in oil prices. The cancellation of large-scale flights has severely hurt the aviation coal market and negatively affected self-driving travel, and will eventually weaken Naphtha demand in China.


Track Real Time Prices

Related News

Global Naphtha Prices Show Stability Amidst Supply-Demand Balance, But Vulnerable to Disruptions
  • 15-Sep-2023 12:36 PM
  • Journalist: Nicholas Seifield
VARO Reveals $600 Million Investment Strategy for Construction of a Aviation Fuel Production Plant in Rotterdam
  • 12-Sep-2023 10:41 AM
  • Journalist: Stella Fernandes
Europe Gasoline & Naphtha-Margins Increase Following Significant Decline in U.S. Reserves
  • 08-Sep-2023 7:59 PM
  • Journalist: Shiba Teramoto
Evacuation Order Lifted as Fire at Louisiana's Marathon Petroleum Refinery Comes Under Control
  • 28-Aug-2023 2:18 PM
  • Journalist: Gabreilla Figueroa