Naphtha prices in the US traded with volatility through May as early demand strength supported steam-cracker activity, but a late-month reversal emerged amid seller reluctance and thinner spot liquidity. Initial gains reflected stronger petrochemical buying and higher refinery throughput, while market participants weighed upstream cost movements. Mid-month conditions steadied as attention remained focused on crude price trajectories. In the closing week, seller withholding and a cooling spot market pushed prices lower, underscoring the market's struggle to balance higher input costs with evolving feedstock choices. Ethane substitution as a cheaper cracker feedstock moderated Naphtha demand, tempering further upside even as petrochemical activity remained a key driver. WTI strength supported refinery economics, increasing input costs and pressuring offers, while a tightly balanced domestic supply chain kept FOB availability constrained. The near-term outlook remains supported by ongoing petrochemical demand and limited supply, but upside risks persist if crude strength holds and liquidity conditions improve. A softer oil backdrop or more aggressive ethane switching could cap gains, sustaining market volatility.
