Price data

According to the latest monitoring data of business associations, the average price of mainstream refinery naphtha in China as of June 30 was 5537.50 yuan/ton, down-7.09% from 5960.00 yuan/ton at the beginning of this month, and the price of refinery naphtha in China continued to decline this month.

II. Market Analysis

International market: Brent crude oil at the beginning of the month was $66.87 per barrel and at the end of the month was $66.55 per barrel, with a rise of – 0.48%. WTI crude oil at the beginning of the month was $56.59 per barrel and at the end of the month was $59.43 per barrel, with a rise of 5.02%. In June, U.S. crude oil stocks continued to decline, tensions between the United States and Iraq and optimistic expectations of Sino-US trade negotiations were the main factors leading the oil market in the near future.

On the naphtha side, the June 28-Asian naphtha cracking spread fell to a one-and-a-half week low of $19.60 a tonne on Friday, hitting a six-week high on the previous trading day, as spot market delivery was relatively quiet after earlier purchases. South Korea’s Hanhua Daodal and SK Energy purchased heavy full-fraction naphtha shipments delivered in the first half of August. Taipei Plastics also bought oil tankers of undetermined specifications delivered in August. South Korea SK Energy bought naphtha on the 24th, the spot demand was basically weak. Bharat Petroleum (BPCL) of India has offered two batches of naphtha with different paraffin content by tender closing June 26, which will be shipped in Bombay from July 8 to 10. Earlier, the company sold Shell a May 11-13 Bombay shipment at an offshore price (FOB) of about $8 per ton higher than its own pricing formula. Mitsubishi Chemical Holdings of Japan and Lichuan Naphtha Cracking Center of Korea (YNCC) finalized the shipment delivered in the first half of August. Titan, Malaysia, and CNOOC, China are seeking to lock in naphtha supply by signing 12-month contracts.

According to the price monitoring of business associations, in June 2019, there were four kinds of commodities rising annually in the energy sector, of which more than 5% of the commodities rose, accounting for 6.3% of the monitored commodities in the sector; the top three commodities were WTI crude oil (5.02%), MTBE (2.46%) and coking coal (0.82%). There are 12 kinds of commodities with a decline of more than 5%, accounting for 31.3% of the monitored commodities in the plate. The products with the first three declines are petroleum coke (-8.44%), liquefied natural gas (-7.64%) and naphtha (-7.09%). This month’s average rise and fall was -3.07%.

3. Future Market Forecast

Energy analysts of business associations believe that the rise in international crude oil prices has supported naphtha; however, terminal demand has not improved significantly, downstream demand-based procurement is dominant, the gasoline and diesel market is weak, and market sentiment is strong; refineries in mid-June are mainly de-stocked, and prices have dropped significantly. Downstream enterprises may enter the July standby period, and the market demand will increase. It is expected that naphtha refining will rebound in July. The average price of naphtha refining in July is expected to be between 5500 and 6000 yuan/ton.