FGE’s Condensate and Naphtha Monthly dissects and examines the volatile short-term market for condensate, to deliver clear, concise, and insightful views on the forward market.
The East of Suez condensate trading market has seen some turbulence this year with the demand destruction from COVID-19 and low oil price environment affecting US condensates which have become a regular inflow to some refiners and splitters in this half of the world.
As for naphtha, weakness in gasoline demand with the COVID-19 situation has resulted in higher levels of arbitrage flows into the East, amid poor blending economics, particularly in the US Gulf coast. Cracker margins have flipped on its head as well with LPG substitution at minimal levels with low naphtha prices.
The recovery in the months to come will see uncertainty in petrochemical margins with inventory overhangs and lower consumer spending likely to weaken fundamentals. This and the onslaught of petrochemical capacity additions and expansions over the next few years will define the picture for condensate and naphtha in the East of Suez in the medium term.
This monthly report provides an Asian perspective of the short-term condensate & naphtha balances, including price outlook and fundamental projection of trade flows such as potential arbitrage opportunity and feedstock switching dynamics between condensate and naphtha.
We look closely at both condensate and naphtha supply and demand East of Suez and forecast an Eastern balance. We factor in regular flows from the West, and how much more may be needed based on Eastern requirements. On the demand side, we look into the olefin and aromatics markets which provide valuable insight into our outlook for condensate and naphtha demand in the region.
The report also contains either a Market or Term feature which highlights key development going forward, as well as dedicated sections and a data file for supply and demand fundamentals in the East and West of Suez and price outlook for the next 6 months.
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