Naphtha Prices will Rise and are Likely to Reach USD 890 per tonne in August 2022 Driven by Stronger Crude Prices

In the American Market, the price of naphtha increased during the starting second quarter of 2022 which was USD 924/MT. In the first half which is Q2, the prices hyped up, due to the interference of the upstream crude oil because of the ongoing war between Russia and Ukraine. The value of naphtha started to decline in the concluding half of second quarter of 2022, like as the European markets.

The drop in the cost valuation is because of the decline in the demand for naphtha from European and Asian countries during the latter half. As naphtha is a feedstock for refineries like for most of the markets, whereas America does not utilise naphtha but the only primary downstream demand for this in America is for the amalgamation of gasoline.

All throughout the second quarter of 2022, the Chinese market was declining on the basis price trend. Due to the prohibition which is sanctioned by the west against the Moscow’s invasion on Russia and its imports because of the cheap and sow supply from Russia on the upstream crude oil during the last month of the second quarter of the year 2022, the price of Naphtha in the market of china was recorded at about USD 1186/MT.

China which is a major new importer whereas Russia is enforced by the sanctions to finds a new customer base for its crude. The declining price trend in various Asian markets for naphtha is because of the poor demand and the destructive cracking margins. The cost valuation at the last of Q2 2022 in India was around INR 66490/MT.

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The various sanctions imposed against the imports of Russia in European countries and hence the price of naphtha rose in the European markets.

The prices in Europe for naphtha hiked radically due to the injunction on Russian imports. Europe was depended for about 50 percent of naphtha requirements in Russia. During the second quarter of 2022, the price of naphtha on the market of Germany was about USD 930/MT.

The naphtha prices started to plunge around the end of the second quarter of 2022, on the other hand the production of naphtha increased due to the elevated run rates of the refineries of the continent.

The sources of the market report said that the Naphtha prices will tend to hamper the demand because of the higher prices and cost valuations for the cracker feed naphtha, which is producing olefins from the naphtha, and run in on low rates by the producers of the olefin because of the margins of bearish.

Between the CFR Japan naphtha and CFR Northeast Asia ethylene physical the price was USD 108.25/MT on the July 1 at Asian close. The minimum breakeven level which is very below for the integrated producers since May 13 at about USD 250/MT which was showed by the data globally.

As per procurement resource, in American market, the price of naphtha increased during the second half of 2022. This was due to the prohibition which is sanctioned by the west against the Moscow’s invasion on Russia and its imports because of the cheap and slow supply from Russia on the upstream crude oil. During the last month of the second quarter of the year 2022, the dip in the price trend in several Asian markets is owing to the lesser demand and the detrimental breaking limits.