Naphtha Prices Face Headwinds Amidst Weak Petrochemical Margins

Correlation with Crude and Gasoline

Naphtha is a primary feedstock for both gasoline blending and petrochemical cracking. With U.S. retail gasoline prices hitting multi-year lows and crude oil markets grappling with a supply glut, naphtha prices have naturally followed the downward trend. This represents a significant decline from the peaks seen in late 2024.

Petrochemical Demand Outlook

Despite the price drop, demand from petrochemical crackers in Northeast Asia remains functional. However, as alternative feedstocks like LPG become more competitive due to their own price weakness, naphtha is facing a challenging competitive landscape. Analysts expect the short-term outlook to remain tethered to the oversupplied global crude market.