Naphtha is a highly versatile commodity. It is a feedstock for the petrochemical industry. It is used for blending into gasoline. It’s also widely used as a diluent.
We source, trade and transport naphtha and condensates for use mainly by the petrochemical industry.
Refineries are the main naphtha suppliers. Most of the traded market in naphtha comes from less integrated refineries. The more integrated refineries both produce it and use it as a feedstock for petrochemical and gasoline uses.
Geographically the Middle East is by far the biggest source. The Mediterranean, India, Africa and South America are also net suppliers. The major consuming countries usually have substantial petrochemical interests. Japan, Korea, and Taiwan are major importers.
PRODUCTS
It can be found in coal tar, shale gas or refined petroleum. It is a light, highly flammable mixture with multiple uses.
There are three main types. Light naphtha is mainly used for the petrochemical industry, but can also be useful in gasoline blending. Medium naphtha meets the full range of uses, including gasoline blending, reforming or petrochemical uses. Heavy naphtha is mainly used for reforming or production of gasoline components like reformate aromatics.
There is a close pricing relationship between naphtha and other markets. It is a key constituent for gasoline. It can account for as much as 30% of the refined product. LPG is increasingly being used as an alternative petrochemical feedstock.
CAPABILITIES
Coverage is the key to successful trading. We have geographic coverage to satisfy demand across the world. Our product coverage allows us to take advantage of its high substitutability with other related products.
Our naphtha trading desk is one of the most active global participants in the market. We trade around 4 million metric tonnes annually, 4% of the freely traded market.
The sheer breadth of uses for the product creates many trading opportunities. We monitor changing customer needs and buy and sell different naphtha grades as required.
We focus mainly on relative values between the different grades of naphtha. We don’t take speculative positions, we use physical arbitrage techniques to bridge price differentials between buyers and sellers.
We price distinct types of naphtha. We source, blend and store the most actively demanded products and grades.
We use derivatives to manage price risk. Our presence in derivatives markets supports liquidity.
INFRASTRUCTURE
Trading teams operate in Singapore, Switzerland, and EEUU. The local offices manage origination and business development. We work with colleagues in Buenos Aires, Puerto Rico, Dubai, and West Africa.
Our close working relationship with gasoline traders adds an important dimension to our activities. Communication between the two desks helps to set relative pricing and lets us determine when it makes sense to supply naphtha for gasoline refining.
We also collaborate closely with the LPG desk. We monitor relative pricing between the two products and shifting demand patterns from petrochemical companies.
Our tankage provides additional flexibility. We have agreed on term contracts with major Iranian producers and store products at our terminal in Iran. we blend up to 1/2 million barrels to different kinds of naphtha depending on market conditions. In the Far East, we blend mainly for heavy. and Light Naphtha