Naphtha Benchmark Prices Soften as Cracker Feedstock Switching Increases

Feedstock Competition

Modern crackers are now more flexible than ever, allowing them to shift away from naphtha when LPG prices drop. This substitution is particularly evident in the Asian market, where the glut of US NGLs is providing a cost-effective alternative to traditional naphtha cracking.

Refining Surplus

As global gasoline prices hit multi-year lows, the byproduct supply of naphtha from refineries is becoming an inventory burden, further contributing to the bearish sentiment in the global naphtha benchmark.