CrudeTuesday, 28 April 2026·India
Naphtha Supply Disruptions Affect Polymer Prices and Production
Ongoing conflicts in the Middle East have led to significant supply disruptions of naphtha, impacting prices and production rates of downstream polymers in Asia. The average Brent crude UK/Norway BFOE assessment rose by 44.0% month on month in March, reaching $99.89/barrel, and naphtha prices are expected to increase further due to tight supply conditions and rising feedstock costs.
Asia imports more than 50% of its seaborne naphtha from the Middle East, making it particularly vulnerable to these disruptions. Over 10 crackers reliant on Middle East naphtha in Asia have declared force majeure, leading to cuts in run rates. Additionally, numerous polypropylene (PP) and polyethylene (PE) plants are also declaring force majeure and reducing production.
South Korea has implemented a ban on naphtha exports since March 27 for five months to preserve domestic inventory. The average price of naphtha has remained above $99.00/barrel in April despite a slight decrease from March. The LSP cracker’s production has been temporarily suspended due to restricted procurement of feedstock naphtha, highlighting the operational challenges faced by producers in the region.
As a result of these developments, buyers may face increased prices and potential supply shortages for naphtha-derived products like polyethylene and polypropylene, while sellers may benefit from higher prices due to tight supply conditions but also face risks from operational disruptions.
Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.
Asia imports more than 50% of its seaborne naphtha from the Middle East, making it particularly vulnerable to these disruptions. Over 10 crackers reliant on Middle East naphtha in Asia have declared force majeure, leading to cuts in run rates. Additionally, numerous polypropylene (PP) and polyethylene (PE) plants are also declaring force majeure and reducing production.
South Korea has implemented a ban on naphtha exports since March 27 for five months to preserve domestic inventory. The average price of naphtha has remained above $99.00/barrel in April despite a slight decrease from March. The LSP cracker’s production has been temporarily suspended due to restricted procurement of feedstock naphtha, highlighting the operational challenges faced by producers in the region.
As a result of these developments, buyers may face increased prices and potential supply shortages for naphtha-derived products like polyethylene and polypropylene, while sellers may benefit from higher prices due to tight supply conditions but also face risks from operational disruptions.
Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.