In our latest naphtha market commentary:
> Northwest European naphtha premia strengthen considerably but unable to overcome still robust Med FOBs, which should subside in the coming weeks as more regional refineries return from maintenance
> While flat to slightly lower freight rates should provide some help, the onus is on NWE sales prices to reopen the arb
> That said, an overly strong ARA complex threatens the still open arb from Rotterdam to New York Harbor, where inbound cargoes of heavy material are now more profitable than Jones Act vessels from the US Gulf Coast for July deliveries
> Far East sales prices remain strong from petrochemical buying, offsetting the strength from the supply side as arbs remain open through early Q4
> Asian forward steam cracker margins still signal propane and butane as more favoured feedstocks rather than naphtha in Asia through September, implying only incrementally higher East-West naphtha spot cargoes
