Naphtha Prices Face Downward Pressure from Petrochemical Feedstock Switching

Cracker Substitution

Petrochemical producers in China and Korea are increasingly switching to cheaper ethane and propane feedstocks, reducing the urgency to buy naphtha. This substitution is particularly evident as U.S. NGL production hits record highs, flooding global markets with light-end alternatives.

Refining Surplus

Refining capacity is being used at a high rate throughout the U.S., ensuring continuous supply. With inventory levels comfortable and auto manufacturers remaining cautious, the floor for naphtha is being tested as it follows the loose crude inventory trend.