According to the commodity market analysis system of SunSirs, the average price of hydrogenated naphtha in the domestic market in 2023 was 6,841.50 RMB/ton at the beginning of the year and 7,746.50 RMB/ton at the end of the year, with an annual increase of 13.23%. The highest point of the year occurred on March 13th at 8,389.00 RMB/ton, and the lowest point of the year occurred on January 1st at 6,841.50 RMB/ton, with a maximum amplitude of 22.62%. The overall market trend of hydrogenated naphtha in 2023 is high, fluctuating and rising.
According to the commodity market analysis system of SunSirs, the average price of straight run naphtha in the domestic market in 2023 was 6,814.00 RMB/ton at the beginning of the year and 7,746.50 RMB/ton at the end of the year, with an annual increase of 12.47%. The highest point of the year occurred on March 13th at 8,241.50 RMB/ton, and the lowest point of the year occurred on January 1st at 6,814.00 RMB/ton, with a maximum amplitude of 20.95%. The straight run naphtha market is at an overall high level in 2023, fluctuating and rising.
In 2023, the market for hydrogenated naphtha has seen more ups and downs, with 8 months of upward movement and 4 months of downward movement. The highest increase was in January, up 15.02%, and the highest decrease was in March, down 7.31%.
The refined naphtha market in mid March saw a significant increase of over 20%. Mainly affected by the strong demand for replenishment of downstream ethylene and reforming units of naphtha before and after the Spring Festival, coupled with the continuous rise in crude oil prices and cost support in the naphtha market, refineries actively pushed up prices, and the naphtha market continued to rise. From mid March to the end of the year, the market for refined naphtha was mainly characterized by narrow fluctuations, with an amplitude of around 10%. The overall market is mainly affected by crude oil fluctuations and downstream demand procurement.
Prediction of Naphtha Market in 2024
On the cost side: In 2023, the international situation will be treacherous. The Federal Reserve's interest rate hike will lead to high interest rate shocks, as well as the impact of geographical turbulence such as the Russia-Ukraine conflict and the Palestine Israel conflict. Demand growth will slow, upstream investment will weaken, while debt will expand, and the global economy will be unstable. As the most important commodity, crude oil has also experienced macroeconomic pressures, risks of supply disruptions, and constraints from expectations of declining demand, resulting in skyrocketing prices and ups and downs. According to the Commodity Market Analysis System of SunSirs, WTI crude oil fell by 8.46% and Brent crude oil fell by 7.56% in 2023. But the amplitude reached 40%. The external environment of crude oil in 2024 is still quite complex, and the geopolitical situation is complex, which will have an unpredictable direct impact on oil prices, resulting in more severe fluctuations. In the long run, the supply-demand game remains dominant, and on the supply side, OPEC's production control will continue to play a role in managing oil price expectations. The demand side faces more uncertainty, and an economic slowdown is likely to create a constraint on oil prices. Due to the large number of oil price variables in 2023, the oil price has been operating at a low level for a long time, and the base oil price is not high. It is expected that the average oil price in 2024 may still be slightly higher than in 2023, but due to demand constraints, the oil price will not increase too much.
Supply side: In recent years, China's naphtha production has shown an increasing trend year by year. In 2023, China's naphtha production reached 78.375 million tons, achieving eight consecutive years of growth. It is expected that China's naphtha production will continue to increase in 2024.
Import and export: In 2012, China lifted import tariffs on naphtha, but the import and export of naphtha were restricted by national quotas. In recent years, China has successively put into operation new naphtha steam cracking to produce ethylene and reforming units, resulting in a continuous increase in demand for raw material naphtha. The domestic supply is clearly insufficient, which has led to a long-term net import of naphtha in China. According to data from the General Administration of Customs of China, from January to November 2023, the cumulative import volume of naphtha in China reached 11.8 million tons, a year-on-year increase of 46.7%; The import amount was 54,319 million RMB, a year-on-year increase of 29.5%.
Demand side: PetroChina and Sinopec account for over 70% of the production of naphtha, but their naphtha has always been sold through internal mutual supply and does not participate in the competition in the naphtha market. Ground refined naphtha is mainly used for catalytic reforming, producing reformed gasoline as a blending component of high octane gasoline; In addition, it is directly used for blending finished oil, a portion is used for producing solvent oil, and a small amount is used for ethylene cracking equipment.
Overall, SunSirs predicts that there are still positive expectations for the 2024 refined naphtha market, and it is expected that the overall market will remain stable with an upward trend. Due to the impact of crude oil fluctuations, there will be periodic fluctuations. In the future, it is still necessary to focus on the trend of crude oil and downstream demand.
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