During the week from June * to **, CFR Far East Asia naphtha prices fell by around **.* per cent, with CFR Japan recording an identical decline. CFR Southeast Asia slipped by approximately **.* per cent, while CIF Northwest Europe recorded a more modest drop of around *.* per cent. The fall was uniform across regions, reflecting a combination of better product availability and weaker underlying crude costs.
Looking at the one-month comparison, the correction appears even more substantial. Against levels recorded around May **, ****, naphtha prices in Far East Asia have fallen by approximately **.* per cent. Japan has seen a drop of about **.* per cent, Southeast Asia has declined by nearly **.* per cent, and Northwest Europe has shed around **.* per cent over the same timeframe. This points to a sharp and broad unwinding of the earlier market tightness.
On the demand side, according to IEA, global naphtha consumption has grown steadily over recent years, rising from around *,*** thousand barrels per day in **** to approximately *,*** thousand barrels per day by ****, with **** estimated near *,*** thousand barrels per day. For ****, however, consumption is expected to ease modestly to around *,*** thousand barrels per day, reflecting a more measured pace of global activity. Meanwhile, petrochemical producers in Japan and South Korea, who rely on Middle Eastern supply for a large share of their naphtha needs, faced disruptions earlier this year when uncertainty around the Strait of Hormuz threatened feedstock availability.
What to watch going forward
