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Asian Refiners Boost Global Naphtha Market Fluctuations] (1) Asian naphtha imports in September are expected to exceed August levels, driven by stable downstream demand and refinery inventory accumulation in preparation for planned fourth-quarter maintenance. Asian cracker operators are actively announcing purchasing intentions to meet anticipated fourth-quarter downstream demand. Despite higher Asian naphtha prices, naphtha remains a favored feedstock for the petrochemical industry, given the strengthening prices of its alternative, propane. (2) European naphtha imports in September are expected to be flat or lower than the previous month's total of 1.84 million tons. European imports fell 10% to 285,000 tons in the week ending September 15. During the same period, inventories at the ARA (Amsterdam-Rotterdam-Antwerp) hub rose 15.4% to 667,000 tons, driven by slower blending activity. Despite ongoing disruptions to Russia's refining and export infrastructure caused by the Russia-Ukraine conflict, market fundamentals in the region remain relatively strong. (3) Middle Eastern naphtha exports are expected to reach 1.98 million tons in September, potentially exceeding August's 4.72 million tons. The region will continue to supply the Asian market, partially offsetting the impact of reduced Russian exports. Despite planned maintenance at two refineries in Saudi Arabia in the fourth quarter, exports from other producers, including the UAE, Qatar, and Kuwait, are expected to remain stable. U.S. naphtha exports are projected to reach 264,000 tons in September, potentially exceeding August's 585,000 tons. Domestic blending demand is weakening as the summer driving season winds down, which is expected to support increased exports, particularly to Asian markets. (4) Asian spot prices for open-grade naphtha climbed 2.69% to $611 per ton (cost and freight), CIF Japan, in the week ending September 15. Upcoming maintenance at Middle Eastern refineries and the drone attack on Russian refineries, which heightened supply concerns, are the primary drivers of the price increase. High feedstock costs are putting pressure on downstream profits, with the ethylene-naphtha spread narrowing by 6.4% this week to $234 per ton. However, naphtha remains the preferred feedstock for petrochemical companies compared to propane. The Asian naphtha-to-propane ratio is 92.9%, and cracker operators typically switch to propane only when it is below 90%. ⑸ Looking ahead, naphtha market fundamentals are expected to remain strong in the coming weeks, supported by factors such as ongoing Russian supply disruptions, upcoming maintenance at refineries in the Middle East, and the potential for stronger LPG prices in winter. Meanwhile, demand in Europe is expected to remain stable.