Naphtha Steam Cracker Margins Hit by Weaker Petchem Demand: Platts

Lacklustre petrochemical demand in Europe has seen steam cracker feedstock margins for naphtha fall in April, according to Platts.

• The Platts CIF NWE naphtha steam cracker margin averaged $268.51/mt for the week ending April 14, compared to the four-week average of $271.58/mt.
• Falling margins have left naphtha as the preferred feedstock over alternatives such as LPG.
• Naphtha has seen some support from tightness in some European petrochemical and derivatives markets, namely propylene.
• "More spikes in petrochemical demand for naphtha" could be expected because "the European petrochemical market has had consistent supply issues for some products,” a trader told Platts.
• Thus, demand for light naphtha is expected to remain robust despite lower margins.
• This sentiment has kept the market in a steeper backwardation, widening to $8.50/mt for April/May, compared to $4/mt April 9.