Japan Naphtha Cracks Under Pressure in Q2: Platts

The C+F Japan physical naphtha crack against brent is expected to remain under pressure in Q2 after hitting a 5-month low due to very narrow petchem margins, according to Platts.

• Additional supply from the Middle East after refineries return from maintenance have offset falling Russian naphtha flows.
• The CFR Japan naphtha physical crack v ICE brent fell to $23.30/mt to a five-month low on April 9, as a bearish naphtha market is outpaced by crude gains.
• Thin margins are likely to cap operating rates at Asian naphtha-fed steam crackers.
• S&P Global analysts expect the light naphtha market to remain under pressure in Q2 due to oversupply and weak demand, along with increased cracking of LPG as a substitute.
• The heavy naphtha market will be better supported by gasoline and aromatics buying.