In our latest naphtha market commentary:
> Naphtha flat price declines have allowed Asian steam cracker margins to recover to breakeven levels, minimising threat of plant rate cuts
> Cracks, E/W spreads to remain well above historical averages through November with possible TARs extensions providing further upside risk
> Recovering gas-nap spreads supports constructive naphtha outlook as incremental blending consumption eases the pressure on petchems sector from being main demand driver
> Influx of AG, Med supply over the last few weeks, coupled with spot cargoes from India have softened Asian sales prices
> Even so, most key Med-East arbs remain profitable although AG FOBs have gained momentum amid plant works
> Rotterdam/ NYH continues to signal no urgency for naphtha resupply through year’s end
> Hurricane Francine has little impact on naphtha markets, although at least one Louisiana refinery might opt to hold on to lower rates until its impending maintenance later this month
