Demand for naphtha in Northwest Europe waned slightly towards the end of the week with petrochemical end-users well covered over the next few weeks, according to sources, further easing supply pressures.
"Crackers around Europe are focused on open spec," a trader said. "There is not much open spec trading right now. Petchems have forward bought to be covered...demand is slower."
End-users have opted to crack naphtha instead of alternative feedstocks such as propane due to high LPG prices.
"Propane is extremely strong at the moment...[that] should be encouraging [petchem] feedstock switching," a second trader said.
Strong demand, however, left the market tight on supply in recent weeks as market participants struggled to come across offers for open spec naphtha.
"Things looked expensive. [But now] some [open spec] is on offer," a third source said.
Offers have been heard in the Baltic, Mediterranean and Northwest Europe, according to sources.
Low premiums have also prompted slower selling activity. Premiums were up to $2.50/mt Friday, having been around $1.50-$2.00/mt Thursday, according to sources.
"No one is short at the moment. Material is around but nobody is really selling," said a forth source.
The naphtha cash differential against the front-month swap fell to $4.50/mt Thursday, having been at a four-month high of $7.75/mt Tuesday, S&P Global Platts data showed.
That reflected greater balance in the market, sources said. - Platts -