In our latest naphtha market commentary:
> Global naphtha cracks to remain strong through Q4 with unexpected supply disruptions providing potential further support
> The flip to contango at the front of the curve signals creep in bearish sentiment as prompt supply anxieties calm somewhat
> The E/W spread to remain unseasonably strong through early Q4 as refinery maintenance looms in September and October, amid lighter y/y steam cracker maintenance in Asia
> Plummeting clean freight, now approaching operating costs, has been insufficient to reopen the majority of global arbs
> Increasing vessel supply as more ships switch from dirty to clean use signals further near-term downside for clean freight
> Freight alone cannot keep arbs open, nor seemingly entice incremental demand substantially, but it is challenging to see how FOB and sales prices cooperate in those efforts given near-term fundamentals
