Spot naphtha prices rise to 3-month high in Asia, Europe

Spot naphtha prices in Europe and Asia have increased by about 20% since the start of this year, recovering from a period of turbulence that saw prices hit multi-month lows. After dropping down below $500/ton during the final quarter of 2018, spot naphtha prices in both continents are currently at their highest levels since November last year.

Volatile crude weighs on prices in Q4 2018

According to data from ChemOrbis Price Wizard shown below, spot naphtha prices on a CFR Japan basis and a CIF NWE basis fell below $500/ton in late December last year, marking the first time prices slipped down the threshold since 2017.

The multi-month low naphtha prices were largely driven by the fluctuating crude oil prices. The pullback in global oil prices began in October 2018 amid signs of oversupply and economic uncertainties. As can be seen in ChemOrbis Price Wizard data above, WTI and Brent crude oil prices plunged more than 40%over the span of just two months. 

Recovery in crude reflected in naphtha in the last two months

However, the OPEC’s production cuts helped WTI and Brent crude oil futures rise by as much as 30% above their late December lows and optimism arising from the ongoing US-China trade talks has also provided a boost to prices. 

In addition to the strong gains in global crude oil futures, the generally healthy demand in Asia and Europe was also cited as a contributing factor to higher prices. 

Prices up by around $85-90 from multi-month lows

The weekly average of spot naphtha prices in Asia has increased by $85/ton from late December 2018, when prices hit a 17-month low, and it is currently reported at around $540/ton CFR Japan. European spot naphtha prices have also risen by around $90/ton from more than a year low level recorded in late December and they currently stand at around $525/ton CFR NWE.