Naphtha Price Trend and Forecast

Regional Price Overview

Get the latest insights on price movement and trend analysis of Naphtha in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Naphtha Price Trend for the First Half of 2023

Asia

The Naphtha market in the Asia-Pacific region remained anchored throughout the first half of 2023. The soaring prices were supported by the strong demand from the petrochemical sector and the rising trade/export activities. However, the trend in the second quarter was somewhat flat compared to the historical values in the high-demand season. Though the naphtha prices in the April-June quarter exceeded the January-March quarter, the incline was minimal as it was affected by the sluggishness of the naphtha market.

The downturn in economic activities and dampened demand led to a glut of products in the Chinese market, thereby actively hampering the price trends for Naphtha. In the Japanese markets, the naphtha prices averaged around 460 USD/MT in Q1 and around 497 USD/MT towards the end of June’23.

Europe

The European region was favorable in terms of the prices of Naphtha as the purchasing appetite of the buyers remained high in the first half of 2023. The prices were supported by the rising demand and improving economic activities of the petroleum market. The rising demand from the hydrocarbon-cracking industries positively affected the prices.

North America

The northward movement of the naphtha prices was supported by the inclining demand from the downstream industries and high export activities in the North American region. The prices were also influenced by the shortage of products as the crude oil costs surged. The prices also surged as the European countries actively looked to replace Russia as its leading naphtha supplier, thereby leading to a rise in exports in US domestic market.

Analyst Insight

According to Procurement Resource, the price trends for Naphtha are likely to incline in the coming quarter. The countries are actively pursuing measures to bridge the price gap between crude oil and Naphtha, which turned negative, meaning Naphtha is worth less than the crude oil it comes from.

Naphtha Price Trend for the Second Half of 2022

Asia Pacific

Naphtha saw a gradual decline in prices in the third and fourth quarters of 2022. The demand from the downstream industries such as plastic and polymer fell, and the weak margins affected the market severely. Due to the rise in covid-19 restrictions, the decline in export due to decreased demand from the petroleum industry, and high competition, the price trend of naphtha declined in the Asian Pacific region.

Europe

In the third quarter, naphtha prices increased owing to the consistent demand and strong export levels of the commodity in the region. The fourth quarter was, however, not favourable in terms of the prices of naphtha. The demand from the end-user industries plunged but the supply remained consistent and the decline in the performance of petrochemical industries led to a decline in the prices. There was a moment of relief during the mid-quarter, as the demand from the North African region increased and supported the naphtha market.

North America

The North American region saw a gradual decline in prices as the demand for natural gas plummeted. The disruption of one of the largest ports and the increase in production rates contributed to this decline in prices. The prices, however, inclined in the middle of the fourth quarter as the demand from the importing economies increased. Still, the uncertainties in the petrochemical industries continued to play a major role in the fluctuating price trend of naphtha.

Analyst Insight

According to Procurement Resource, the price of naphtha is estimated to increase in the upcoming quarter. The improving market conditions, ease in covid restrictions and expected improvement in the petrochemical sector will lead to an incline in the prices.

Naphtha Price Trend For the First Half of 2022

Asia

Naphtha prices kept on the higher end of the scale in the Chinese domestic market during Q1. The resurgence of covid-19 caused the government to impose temporary restrictions on industrial activity. This severely impacted industrial production, thereby depleting inventories and creating shortages. The robust downstream demand from the medical and pharmaceutical sector supported the higher quotations of Naphtha, averaging 1363 USD/MT.

The prices in the Indian market were stable as compared to the Chinese domestic market, as cheap raw materials were readily available from Russia via cheap imports. With Russian imports readily entering the Chinese domestic market during the second quarter, coupled with the upliftment of pandemic-related shutdowns, naphtha prices fell across the market.

Europe

The petrochemical industry was heavily impacted due to the Russian-Ukrainian geopolitical conflict. With a majority of European countries directly dependent on Russian supplies for more than 50% of their energy needs, the sanctions against Russian exports triggered a staggering energy crisis in Europe.

The solid demand from downstream polyethene and polypropylene industries further supported the high prices of Naphtha. However, these higher prices led to demand destruction giving rise to cautious wait-and-see buying activity. Hence, naphtha prices fell towards the end of the second quarter.

North America

Naphtha prices readily increased throughout the US domestic market during the first quarter, given the soaring prices of crude oil and natural gas. The manufacturers raised their respective quotations to cushion their profits amid high downstream demand. However, the second quarter couldn’t keep up with the gained momentum in prices in the first quarter per the relinquished demand surge.

Analyst Insight

According to Procurement Resource, naphtha prices will likely crash further on the back of copious supplies as OPEC+ has changed their supply policies. Moreover, the demand for downstream plastics and polymers has gone drab and feeble.

Procurement Resource provides latest prices of Naphtha. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.