Naphtha Market Dynamics Report – Recent Commodity Market Intelligence

I. Price Trends
- Domestic Prices:
- On May 20, 2026, the Business Network’s (Shengyishe) benchmark naphtha price stood at RMB 7,536.67 per metric ton.
- On May 19, 2026, Shanneng Petrochemical raised its hydrotreated naphtha quotation; prices in the Shandong region ranged from RMB 7,660 to RMB 7,900 per metric ton among certain enterprises.
- From May 14 to May 18, 2026, the benchmark naphtha price exhibited a mild upward fluctuation, rising from RMB 7,446.67 to RMB 7,536.67 per metric ton.

- International Prices:
- On May 26, 2022, international crude oil futures surged significantly: U.S. WTI crude oil futures (front-month contract) settled at USD 114.09 per barrel, up 3.76%; Brent crude oil futures (front-month contract) settled at USD 114.17 per barrel, up 3.05%. Crude oil price volatility exerts a direct impact on naphtha pricing.

II. Market Supply and Demand
- Supply Situation:
- The global naphtha market displays regional divergence, with differing supply-demand outlooks across Asia, Europe, and the United States.
- Asia: The South Korean government plans to reduce ethylene production capacity; Japanese naphtha demand is steadily declining; meanwhile, import disruptions—stemming from Middle Eastern conflicts and shipping constraints in the Strait of Hormuz—have tightened supply.
- Europe: Facing structural contraction, conventional petroleum-based naphtha demand is decreasing; however, rising demand for aviation fuel blending and advancing bio-based naphtha substitution projects partially offset this decline.
- United States: Expected to experience modest recovery, supported by easing ethane substitution effects from shale gas and commissioning of new petrochemical facilities.

- Demand Situation:
- As a primary feedstock for ethylene, propylene, and other fundamental chemical products, naphtha demand closely correlates with downstream chemical markets.
- Rapid growth in demand for advanced polyolefins, engineering plastics, and electronic chemicals has heightened requirements for high-purity, low-impurity naphtha feedstocks.

III. Corporate Developments
- Pricing Adjustments:
- On May 19, 2026, Shanneng Petrochemical raised its hydrotreated naphtha quotation.
- Similarly, on May 14, 2026, Shanneng Petrochemical adjusted its hydrotreated naphtha quotation upward.
- Other Shandong-based enterprises—including Hongyang Chemical and Qingdao Chengxin Hongfeng Chemical—also implemented price adjustments, indicating relatively high market activity.

- Capacity and Projects:
- China’s naphtha market has long featured “concentrated capacity and differentiated demand,” with the East China region serving as the primary hub for production capacity.
- Advancement of integrated refining & petrochemical projects has enhanced domestic naphtha self-sufficiency; however, import dependency remains elevated.
- Commercial-scale production of bio-based naphtha has emerged as an industry highlight, gaining traction in sustainable aviation fuel (SAF) and high-end specialty chemicals applications.

IV. Policy and Macroeconomic Environment
- Environmental Regulations:
- Stricter environmental policies are steering the naphtha industry toward greener, lower-carbon development pathways, compelling enterprises to adopt advanced environmental technologies and carbon capture solutions.
- Bio-based naphtha—offering substantially lower carbon intensity compared to conventional production routes—is gradually gaining market acceptance.

- Geopolitical Factors:
- Geopolitical conflicts and trade frictions have heightened supply uncertainty for naphtha, amplifying price volatility.
- Uncertainty surrounding Russian supply constitutes another key variable for Asian markets; tightening scrutiny of Russian-origin cargoes has dampened buyer interest.

Analysis, Outlook, and Forecast

I. Short-Term Price Trend
- Influenced by international crude oil price fluctuations, regional supply-demand imbalances, and corporate pricing actions, naphtha prices are likely to continue exhibiting mild upward volatility in the near term.
- Asian markets—constrained by tight supply and resilient demand—offer strong price support; European markets may face downward pressure due to declining demand and carbon neutrality policies; U.S. markets are expected to remain stable, underpinned by recovering demand and increased exports.

II. Medium-to-Long-Term Market Trends
- With continued progress in domestic integrated refining & petrochemical projects and growing downstream chemical demand, the overall naphtha market size will expand further—but growth drivers will gradually shift from volume expansion to structural optimization.
- Emerging segments such as bio-based naphtha hold substantial growth potential and are poised to become new engines of industry expansion.
- Technological innovation and green transformation will serve as critical catalysts for industry development; enterprises must intensify R&D investment to enhance product value-added and competitiveness.

III. Risks and Opportunities
- Risks—including geopolitical conflict, trade friction, and evolving environmental regulations—may disrupt the naphtha market; enterprises must closely monitor market dynamics and policy developments and adjust business strategies accordingly.
- Rapid advancements in new energy and new materials sectors present fresh opportunities for the naphtha industry; enterprises should proactively seize these opportunities, broaden market reach, and achieve sustainable development.