For the Quarter Ending March 2024
North America
In the US, Heavy Aromatic Naphtha Solvents (HAN) are experiencing an upward price trend, driven by increased costs of crude oil and naphtha, which serve as their primary feedstock. Despite these price hikes, demand for HAN remains at a moderate level within downstream sectors including paints, coatings, sealants, and construction.
The rise in feedstock prices is putting pressure on the overall production costs of HAN, leading to the inclined price trend observed in the market. However, despite the higher prices, demand from downstream industries remains steady, indicating continued reliance on HAN for various applications.
Supply dynamics throughout the quarter have been mixed, with poor weather conditions affecting the start of the month's supply, followed by a return to normal supply levels later in the quarter. Despite these supply disruptions, the market has been able to meet moderate demand levels.
Overall, while facing upward price pressures due to increased feedstock costs, the HAN market in the US maintains stability with moderate demand and a return to normal supply levels after initial weather-related disruptions.
APAC
Throughout the first quarter of 2024, Heavy Aromatic Naphtha Solvents experienced an upward trajectory, driven by significant cost pressures stemming from Naphtha and Crude oil prices. Meanwhile, India's industrial sector exhibited continuous development in February as the fiscal year concluded. Bolstered by cutting-edge technology, production levels surged in tandem with a notable increase in new order inflows and favorable demand conditions. Enterprises within the sector continued to encounter robust demand from downstream segments including paint & coating, adhesive, and sealant industries. Indian refiners responded to tightened tonnage supply for moving Russian cargoes on non-sanctioned vessels by increasing their crude oil purchases from Iraq, the UAE, and Qatar last month. This strategic shift impacted Indian refineries, with 48.3% of crude oil imports sourced from Middle Eastern countries and 27.8% from Russia in March. Furthermore, heightened demand from downstream industries such as paints, coatings, and other solvents contributed to increased consumption of Heavy Aromatic Naphtha in the market. The price for March was finalized at USD 851 per metric ton on an Ex-Kandla basis.
Europe
In the European region, the market for Heavy Aromatic Naphtha Solvents (HAN) witnessed an upward price trend despite a decline in demand. Derived from crude oil and naphtha, these solvents play a crucial role in downstream industries such as paints, coatings, sealants, and construction. Despite the inclination in price, demand for HAN experienced a decline, reflecting subdued activity in the paints, coatings, and sealants sectors. This downturn in demand may be attributed to various factors, including economic uncertainties, reduced construction activities, and shifts in consumer preferences. The construction sector, a major consumer of HAN-based products, may have been particularly affected by factors such as fluctuating raw material costs, regulatory changes, and supply chain disruptions. Additionally, the paints and coatings industry, closely linked to construction and manufacturing activities, may have faced challenges due to subdued consumer spending and reduced investment in infrastructure projects. Overall, while the price of Heavy Aromatic Naphtha Solvents showed an upward trajectory, the decline in demand within key downstream industries poses challenges for suppliers and manufacturers operating in the European market.
For the Quarter Ending December 2023
North America
During the fourth quarter of 2023, the Heavy Aromatic Naphtha (HANS) market in the US continued to experience a bearish trend, primarily driven by weak cost pressure from the feedstock Naphtha. Despite signs of improvement in the downstream construction sector, the consumption of HANS faced a reduction due to the ample availability of the product in the domestic market. Additionally, inquiries from the overseas market witnessed a decline during this period.
Companies consistently linked the decline in operating conditions to factors such as global economic weakness, persistent inflationary pressures, and a growing number of projects being put on hold. The market experienced an ample supply of the product, leading to sufficient stockpiles. Towards the end of the year, some discounted prices were offered as the market aimed to manage excess inventory.
As the year ended, businesses in the domestic market embraced a just-in-time purchasing approach, showing reluctance to accumulate excess materials during this period. Additionally, Mexico witnessed a milder decline in coating sales, and destocking activities contributed to keeping the prices of the product subdued in the region.
APAC
The cost of Heavy Aromatic Naphtha Solvent (HANS) exhibited to a mix trend in the fourth quarter of 2023 in the Indian domestic market. The festive season in India typically brings about optimism, especially in the construction sector to renovate the houses. The sustained growth in new business activities continued to drive recruitment initiatives among goods producers in India. The purchasing activity from the end-use industry remained strong, indicating a gradual increase in demand for the product throughout October. During mid and final month, the cost of the product dipped due to the raw material, crude oil, experienced an 8% depreciation in the Indian market, benefiting downstream derivative sectors. Furthermore, end-of-the-year destocking practices, coupled with affordable price movements, potentially led to a decrease in the overall value of the product. The manufacturing Purchasing Managers' Index (PMI) experienced a slight decrease but remained above the long-term trend. Additionally, employment levels were largely stable in December.
Europe
Throughout the fourth quarter of 2023, Heavy Aromatic Naphtha (HANS) witnessed a decline in cost, driven by lower feedstock prices in the region. Moreover, there was subdued demand for the product from the downstream paints and coatings sector in the Eurozone's construction industry. On a global scale, the market observed an upswing in the supply of feedstock crude oil, a development linked to major oil traders reengaging in transactions with Venezuela. This renewed activity follows the recent relaxation of sanctions on the Latin American country, particularly within its oil industry. In October, the United States lifted most sanctions as part of an agreement between the Nicolas Maduro government and the opposition, potentially paving the way for elections in the upcoming year. In 2023, the petrochemical sector faced reduced demand, influenced by Germany's sluggish economic conditions, notable destocking of inventories, and an overall lack of robust demand. The industry contended with challenges such as elevated inflation, increasing interest rates, and geopolitical tensions, further contributing to uncertainties and risks affecting the growth of the Heavy Aromatic Naphtha product.
For the Quarter Ending September 2023
North America
Throughout the third quarter of 2023, the price trend of Heavy Aromatic Naphtha Solvent (HAN Solvent) in the US market remained stable to weak. Several factors contributed to this pricing pattern, including a notable increase in crude oil prices. Despite the rise in crude oil costs, the demand for HAN Solvent remained subdued in the market. The challenges faced by the United States' manufacturing sector played a significant role in this pricing trend. During this period, there was a notable decrease in new orders, which can be attributed to subdued domestic demand, particularly from the construction industry. The construction sector's performance was underwhelming, and this had a ripple effect on industries relying on construction-related products, including HAN Solvent. In response to the challenging business environment and decreased demand, companies in the manufacturing sector significantly reduced their inventory levels. This scaling back of procurement activities further contributed to the weak market conditions. The lackluster performance of downstream manufacturing industries added to the constraints on global trade growth. The decline in new orders can be attributed to the prevailing economic conditions, which made customers cautious when considering new contracts or purchases.
Asia
Throughout the third quarter of 2023, the price of Heavy Aromatic Naphtha Solvents (HAN Solvents) in the Indian market exhibited a mixed trend. The quarter began with a decline in HAN Solvent prices due to the abundant availability of the product in the country, which was partly attributed to a smooth flow of cargoes. However, the situation began to change as the quarter progressed. One of the key factors impacting the price trend was the rise in upstream crude oil prices, which in turn affected the prices of various downstream solvents. This trend didn't immediately affect HAN Solvents due to specific market conditions. Traders observed that heavy monsoon rains during the previous month had left inventories healthy, ensuring an adequate supply to meet the country's needs. As a result, traders started offering discounts to destock their existing inventories. The second half of the quarter saw a significant change in the price dynamics. Crude oil prices increased by 8%, and Naphtha prices surged by 8.2% during this period. These price hikes in feedstocks began to put pressure on the overall cost structure of HAN Solvent production, leading to an increase in its prices. Furthermore, the demand for HAN Solvents remained firm during this period, primarily driven by the coating and painting industry. This industry saw a slight upturn, which can be attributed to a similar improvement in the construction sector. The construction industry often relies on coatings and paints for finishing and protecting structures. Additionally, factors such as higher labor costs and strong demand contributed to shaping the price dynamics of HAN Solvents during the third quarter.
Europe
During the third quarter of 2023, the price of Heavy Aromatic Naphtha Solvent (HAN Solvent) displayed a declining pattern in the market. Several factors contributed to this price trend, including weak demand from downstream industries such as paints, coatings, and construction. Despite the high-cost pressure from upstream crude oil prices, the demand for HAN Solvent remained weak throughout the entire quarter. One of the key factors impacting this decline in price was deteriorating demand conditions, particularly in German. This led to a reduction in input purchases by manufacturers throughout the quarter. The reduction in demand was significant, marking the steepest decline of the year. The construction industry, including housing construction, saw a rapid and notable decline during this period. In fact, it reached its swiftest rate of contraction since November 2022. This decline in construction activity had a cascading effect on industries that rely on construction-related products, including HAN Solvent. Business confidence in the eurozone's construction sector remained low in September, with companies generally expecting a further decline in activity over the coming year. This overall economic sentiment also contributed to the weak demand for HAN Solvent during the third quarter.
For the Quarter Ending June 2023
North America
Prices for Heavy Aromatic Naphtha Solvent remained largely on the bearish trend this quarter due to depreciation of crude oil and slow demand from downstream paint, coatings and solvent industries. The declining prices of crude oil along with subsidization of energy costs largely indicated heavy production of Heavy Aromatic Naphtha Solvent in the region. The downstream production rate being optimal in addition to subsidized energy costs and improvements in the supply chain, meant supply was high in the region. However, demand remained poor as hikes in interest rates by the Federal Reserve were eminent. This overall led to a negative sentiment on the purchasing outlook in paint and coating industries. Even though the construction and housing segment showed signs of improvement in the beginning of 2023, demand from the paint industry remained largely on the negative sides, which may have further compelled the distributors and traders to sell products at negotiable prices, thereby declining profit margins along with further depreciation of prices.
APAC
The prices for Heavy Aromatic Naphtha Solvent remained largely on the bearish trend due to depreciation of crude oil and slow demand from downstream paint, and agrochemical industries. The declining prices of crude oil along with no records of plant shutdowns indicated adequate production of Heavy Aromatic Naphtha Solvent in the region. The downstream production rate being optimal in addition to subsidized energy costs and improvements in the supply chain, meant supply was high in the region. However, demand remained poor as the demand from the agrochemical industry showed no signs of improvement. These overall market fundamentals led to negative sentiment regarding the purchasing outlook of the product. Sluggish economic growth and poor export offers maintained demand largely on the negative side, which further compelled the distributors and traders to sell products at negotiable prices, thereby declining profit margins along with further depreciation of prices. The final prices of Heavy Aromatic Naphtha Solvent were recorded to be USD 705/MT Ex-Spot Kandla.
Europe
The market situation for Heavy Aromatic Naphtha Solvent remained largely on the bearish trend, in Europe too, during this quarter due to falling crude oil and slow demand from downstream paint, coatings and solvent industries. The declining prices of crude oil led low-cost production of Heavy Aromatic Naphtha Solvent in the region. The downstream production rate being optimal in addition to subsidized energy costs and improvements in the supply chain, meant supply was high in the region. However, little demand existed from the paint and construction industry which overall led to an oversupplied market with traders and distributors selling stocks at discounted prices to mitigate excessive inventory in the face of low demand. Export orders from overseas also were not healthy as worries of the global economy entering into recession casted a negative outlook on the market players, thereby keeping purchasing activities to a minimum.
For the Quarter Ending March 2023
North America
Heavy Aromatic Naphtha Solvents have had variable pricing trends throughout the USA in the first quarter of 2023. The price leveled out in January as a result of slow construction, paints & coatings, and other solvent sector orders. The makers reported a high price trend in the US market after the price trend flattened and demand for the product somewhat increased. Further, the new orders from the end-use industries declined for the fourth successive month in January, and it continued throughout the quarter.
Asia
Before modestly rising in the final month, the price of Heavy Aromatic Naphtha initially showed a trend toward decline over the first two months. There was much inventory from other Asian countries, according to the traders, and inexpensive cargo was imported for the Indian market. Domestic market players assert that demand has been stable to weak and that there have been few instances of end customers requesting new orders, which has resulted in a negative attitude towards pricing. In March, prices started to rise as a result of expansion in the cleaning products and paints & coatings businesses. The overall operational conditions improved for the twenty-first straight month, according to the PMI data for March.
Europe
Heavy Aromatic Naphtha Solvents' cost decreased in Europe during the first quarter of 2023 as a result of steady supply and enough market supply. Little demand existed for the product in the building, coating, and other solvent industries, and most downstream procurement was driven by demand. The European region's downstream solvent industries were affected by high-interest rates and other pertinent considerations. German exports are negatively impacted by the weak global economy, and rising inflation rates negatively impact consumer spending and construction activity by lowering purchasing power and sharply raising borrowing costs.
For the Quarter Ending December 2022
North America
The same pattern emerged this quarter in both the North American and European markets for Heavy Aromatic Naphtha Solvent. Upstream production was constrained by the average demand for this commodity from partners further downstream. The paints and agrochemical industries were able to meet their production needs because this product was readily available in stores. The moderate demand for the product from other businesses downstream also affected its prices. The cost of upstream crude oil decreased as well, resulting in a significant decrease in this product's price.
APAC
This quarter saw a decline in the market for Heavy Aromatic Naphtha Solvent across the entire Asia-Pacific region. There are numerous reasons why this product's price has decreased in China. The provincial governments' implementation of Covid-19 curbs and the diminished performance of the crude oil market were the primary factors that contributed to the price drop for upstream crude oil. In addition, businesses that make agrochemicals, paints, and cleaning products with Heavy Aromatic Naphtha Solvent had to reduce their production rates due to average demand significantly. India's market for this commodity was comparable to China's during this quarter. The average demand for this product from downstream industries and its ample inventory availability, which satisfied downstream companies' demands for the production of their end products, impacted its price.
Europe
This quarter saw a decline in the market for Heavy Aromatic Naphtha Solvents in Europe. Natural gas and energy prices significantly increased up until the second week of December as a result of the ongoing conflict between Russia and Ukraine. Consequently, downstream businesses showed average interest in this product despite their extreme concern. The market for Heavy Aromatic Naphtha Solvents in Germany and the Netherlands followed similar trends. This product's price decreased in Germany and the Netherlands this quarter due to the same factors. As a consequence of this, upstream businesses across Europe have been sustaining moderate production rates.
For the Quarter Ending September 2022
North America
This quarter, the markets for Heavy Aromatic Naphtha Solvent in North America and Europe both experienced the same trend. The summer break slowed down production, resulting in a shortage of workers. As a result, paint manufacturers had to reduce their production rates, and agrochemical companies had to reduce their manufacturing activities. The product's prices, which were influenced by the decrease in costs of upstream crude oil, were also influenced by the moderate demand for this product from businesses downstream.
APAC
Heavy Aromatic Naphtha Solvent saw growth in costs in the Asia-Pacific region this quarter. In India, the price of this product was primarily influenced by the events that were happening in the upstream crude oil markets. The varying degree of demand that agrochemical, paints, and cleaning products production companies were exhibiting for this product also had an impact on the costs of this product. In addition to these, the depreciation of the Indian Rupee against the US dollar too affected the cost of this product. Hence, this product closed its market in India this quarter at USD 1,312 per MT on a (spot) ex-Kandla basis. When it comes to China, the market of this product followed a similar trajectory to that of India in this quarter and was driven by the same factors that drove the Indian Heavy aromatic naphtha solvent market.
Europe
In this quarter, the market for Heavy Aromatic Naphtha Solvent declined in Europe. Production and energy costs were significantly impacted by the limited supply of natural gas and crude oil brought on by the ongoing conflict between Russia and Ukraine. Consequently, despite their extreme concern, downstream businesses showed only passing interest in this product. The market for heavy aromatic naphtha solvents in Germany and the Netherlands followed similar trends. The same factors that reduced the price of this product in the Netherlands this quarter also contributed to the price drop in Germany.
For the Quarter Ending June 2022
North America
Heavy Aromatic Naphtha Solvent prices were stable at a higher level in the North American region during the second quarter of 2022 as per Chem Analyst monitoring data observations. Combined with the arrival of the peak summer driving season in the United States, demand should improve, and supply and demand fundamentals remain positive for oil prices. In the traditional peak season of crude oil consumption and the season of extreme weather such as hurricanes, crude oil tends to reach new highs, and international oil prices continue to rise. The inventories were steady with the traders in the regional market during the period.
Asia
Despite supply disruptions in Libya and the prospect of further reductions in Russian oil supplies, crude oil prices rose on Thursday. Asian demand may improve following lower light sour crude prices, spurring pockets of buying interest from regional refiners. Surging prices of upstream feedstock Crude Oil supported the upward movement of Heavy Aromatic Naphtha Solvent prices in the Asian region during the second quarter. Escalating demand for the product from the downstream lubricants, greases, adhesives, sealants, polishes, and waxes put cost pressure on the product. With a quarterly escalation of 9.2% in India, as recorded by Chem Analyst pricing team data, the inventories were observed to fall with rising demand.
Europe
The European market saw a stable surge in Heavy Aromatic Naphtha Solvent prices during Q2 of 2022, with fluctuating demand from the downstream market. The market sentiments fluctuated due to the ongoing war between Russia and Ukraine, pushing prices downwards in the regional market. The traders were confused with the freight charges, which created chaos during the period. Disruption in supply chain values affected the market, which indirectly affected the costs of the product. The product consumption and the downstream market trade increased, decreasing the inventories and lesser products being stockpiled with the suppliers.
For the Quarter Ending March 2022
North America
Heavy Aromatic Naphtha Solvent prices in the North American region have stayed buoyant throughout the first quarter of 2022 on the back of soaring upstream crude value. The increased raw material costs became a burden when the West Texas Intermediate (WTI) crude prices reached their record heights, costing more than USD 123 per barrel on March 8th, pressuring the downstream solvent players. To sustain their margins, the regional manufacturers implemented frequent price revisions in the region. However, stable demand fundamentals kept the Heavy Aromatic Naphtha Solvent prices from rising further in the domestic market. Accordingly, the United States price discussions for the solvent closed between USD 910 per MT towards the quarter ending March.
Asia Pacific
Taking pressure from skyrocketing upstream crude value, Heavy Aromatic Naphtha Solvent prices traced uphill during the first quarter in the Asian market. Rising crude oil value has been a matter of concern for all the downstream players, as it’s triggering a precipitous rise in prices of various commodities, including Heavy Aromatic Naphtha Solvent, across regional market. Meanwhile, demand fundamentals for the product with the increasing technological advances in the automotive sector have encouraged this uptrend across the regional market. Conclusively, the Chinese Heavy Aromatic Naphtha Solvent prices in Asia were sky high by mid-March, which later traced downhill and was assessed as USD 1320/MT in the quarter-end.
Europe
During the first quarter, the Heavy Aromatic Naphtha Solvent prices remained strong taking support from the soared upstream value. Crude oil began the year on a firm note while prices were assessed as USD 80-90 per barrel. However, Russia’s invasion of Ukraine aggravated market dynamics worldwide. Consequently, Brent crude prices went haywire, touching USD 128 per barrel in March. Thus, the derivative Heavy Aromatic Naphtha Solvent prices in the regional market broke charts this quarter, and production costs increased substantially. At the same time, the solvent supplies were tightened in the downstream Automobile sector. Hence, after the conclusion of the first quarter of 2022, solvent prices including Heavy Aromatic Naphtha witnessed a hike of 8-12% across the European market.
For the quarter Ending December 2021
North America
Significant fluctuations have been observed for Heavy aromatic naphtha solvent across US market during Q4 2021. Demand fundamentals maintained overall stability throughout the quarter, while rising input cost kept on pressuring domestic convertors. It was observed that price rose effectively during October and November, on the back of high upstream crude oil value amidst consistent escalation in domestic demand pattern. Furthermore, Crude oil value tumbled effectively during the November, consequently naphtha solvent also went down initially during December and later started rising inline upstream cost. Conclusively, Heavy Aromatic Naphtha Solvent kept on oscillating throughout the quarter and an increment of around 3% was observed during October-November month in US market, where prices fluctuated between USD 800/MT to USD 850/MT across the region.
Asia
Mixed market sentiments were observed for Heavy Aromatic Naphtha Solvent across Asian market during this quarter. Marginal fluctuations were observed for Heavy Aromatic Naphtha Solvent in India throughout Q4 2021, as the demand form the domestic market remained stable from the downstream sector till November, which later decline during December due to demand dullness induced after festivities in India. Heavy Aromatic Naphtha Solvent revolved around USD 3922/MT during October. Meanwhile, Chinese market witnessed ample availability for the product across domestic market throughout this period, while demand fundamentals also remained marginally dull after imposed production cuts in the country.
Europe
Naphtha solvent demand across European market remained stable throughout the quarter, as the market heard going through a consistent bounce back in economic activities. Furthermore, enormous surge in energy cost remained a major concern for key players, as despite of easing crude value production cost getting expensive week over week in the regional market. In addition, logistical issues also remained persistent during this timeframe, which eventually resisted the actual economic growth of the region. However, traders heard seeking cheaper cargoes from regional market in the meantime, to counterbalance the overall supply issue. Conclusively, prices heard hovering around USD 915/MT during November in European market.
For the Quarter Ending September 2021
North America
During the 3rd quarter of 2021, the prices of Heavy Aromatic Naphtha have been on an uptrend owing to an increase in prices of crude oil. The OPEC+ decision to cut down production of crude had specifically impacted the availability of heavier crudes which are crucial for greater outputs of Naphtha. Refinery shutdowns in the US Gulf coast during the hurricane season had further impacted supply and led to a sharp spike in prices during the month of September. No immediate relief in prices can be expected as the prices of crude continue their upward surge even into Q4.
Asia Pacific
In the Asia Pacific region, the overall market outlook of Heavy Aromatic Naphtha showcased an upward trajectory in Q3 2021. An upturn in the prices of Heavy Aromatic Naphtha during the 3rd quarter came in the backdrop of firm crude oil prices in the Chinese domestic market. Demand also increased as the key Asian economies recovered after containing delta variant cases. Increased price for crude oil remained in the Asia Pacific region backed by active purchases by the downstream sectors supported the uptrend in bulk pricing.
Europe
The European market witnessed a substantial rise in the pricing trend of Heavy Aromatic Naphtha in Q3 2021 on the back of increasing crude oil prices across the region. In terms of supply, it has been termed as tight for Q3 in Europe where demand for Naphtha witnessed a significant rise as market participants moved from costly LPG to Naphtha. Tight supply also meant that there was a decreased flow of arbitrage from Europe to Asia. Furthermore, firm crude prices kept upward pressure on the prices of Heavy Aromatic Naphtha solvent in major European markets.
For the Quarter Ending June 2021
North America
Supplies improved in the North American region as manufacturing units sensed recovery from the devastating impact of the winter storm Uri in Q1. Several refiners were heard operating at optimum rates after downstream players resumed production in the US Gulf region. Offtakes from several downstream industries picked up due to the production hinderance incurred in the previous quarter, while some were seen actively stockpiling the material due to the upcoming hurricane season in USA. sentiment for the procurement of large volumes strengthened among the spot buyers. As a ripple effect, the pricing trend remained buoyed throughout the quarter in the North American region.
Asia Pacific
Due to surge in COVID cases in India, petrochemicals demand in Southeast Asia remained dull for a larger part of Q2 2021. Despite slowness in market activities, Heavy Aromatic Naphtha prices witnessed marginal gains on the back of firm values of upstream crude oil. China imposed consumption taxes on the imported heavy aromatic commodities which further curtailed the margins of the local manufacturers. High demand from the octane blend stock market was reported in China due to sharp economic rebound. Demand from the solvent sector was reportedly firm in India. The average quarterly price of Heavy Aromatic Naphtha Ex-Works pricing in June settled at USD 3806 per tonne.
Europe
During the second quarter of 2021, Heavy Aromatic Naphtha solvent supplies in the European region were tight due to high consumption by petrochemical and gasoline blending users in the regional market. Supply conditions were improved over the last quarter as several producers in the Middle East restarted production and import volumes from the US improved in the second quarter. Mass vaccine rollout improved the material movement in the European region. As a result, offtakes from the downstream petrochemical manufacturing units and gasoline blending sector surged.
For the Quarter Ending March 2021
North America
Naphtha supplies in the region were constrained throughout the first quarter, due to shut down of several refineries in the region as the rigorous freeze weather in the USA Gulf region forced production units to shut for indefinite period. The demand slump in the mid-quarter due to curtailed refinery operations while export volumes dropped significantly to the Asian and European region as the refineries run rate slumped by 28% within Q1. Soaring crude maintained upwards pressure over the price curve. The slump in refinery operating rates subsequently surged the prices of Heavy Aromatic Naphtha and other downstream products in the North American region.
Asia-Pacific
The supplies of Heavy Aromatic Naphtha remained tight during Q1 due to multiple throughput cuts impended by OPEC+ nations in crude oil processing. Asian refiners proportionally surged the prices of Heavy Aromatic Naphtha in the Asian Markets. The demand outlook remained uncertain due to some planned and unplanned plant turnarounds including the shutdown of ENEOS olefins plant in Japan due to earthquake in February. Towards the end of the quarter, the market outlook showed improvement due to the addition of new crackers in China and sturdy offtakes for aromatics production. Due to the high transportation freights and supply chain uncertainties, the prices of Heavy Aromatic Naphtha in India witnessed slightly uptrend with the quarterly average standing around USD 3729/ton.
Europe
Demand for Heavy Aromatic Naphtha solvent was sluggish during the first quarter of 2021, as the refineries in the Northwest European region were operating at the reduced operating capacities due to severe cold weather, followed by reduced imports from the USA. Some relief was observed as a major supplier to the region reduced the offered prices to the downstream converters. Demand was ample in the European region as the consumption from the downstream sector improved, however supplies seemed balanced with limited commercial and industrial activities.
For the Quarter Ending December 2020
North America
The crude oil industry remained highly affected by low consumption of heavy naphtha solvent amid moderate recovery from the pandemic related uncertainities. Many refineries in the US were kept shut and many of them were running on lower capacities due to weather related challenges. Storms across the gulf region also affected the running status of major production units. Later during December, when demand from the Asian countries and from domestic market started rising, the prices started reporting healthy figure. Manufacturers started cutting production to increase the prices and improve margins. In addition, Shell announced in November the closure of its refinery located in Baton Rouge and New Orleans. This shut will reduce the supply of crude derivatives in upcoming years across the region.
Asia
Demand for Heavy Aromatic Naphtha solvent was weak in the Asian region during Q4 2020. This led to oversupply of heavy naphtha and the prices faced downward trend. Due to lower than anticipated prices and weak margins, the production units lowered their production levels and started running around only 70% of their original capacities. Although export supply was kept short due to container shortages between Asia and Europe, the demand saw a staggering rise. Despite of healthy COVID-19 recovery in several Asian countries like China and India, the demand was low but improved compared to the prior quarter. Prices for heavy naphtha prices also improved from the record lows observed in Q2 to touch normalcy in Q4.
Europe
Amid the second wave of COVID 19 in the European region, the demand of heavy naphtha kept on bottom line. Re-imposition of COVID-19 restrictions reduced the domestic oil consumption in the European countries like Russia, Germany, Italy etc. New coronavirus strain and full lockdown in UK pushed the prices and consumption to the surface. Even in December 2020, due to low demand, the prices of crude oil were seen going down every week e.g., brent crude prices in late December reduced by around 1.7% and settled at USD 50/bbl. The crude rates significantly drove the rates of Heavy Aromatic Naphtha. Meanwhile rolling out of vaccines enhanced the market sentiments, and manufacturers anticipated healthy recovery in industrial and domestic activities in the upcoming quarter.
