ASIA NAPHTHA MONTHLY OUTLOOK

November 9, 2020

Naphtha cracks projected to turn bearish in Q4 2020 due to major unplanned

ethylene outages in Asia. 2021 cracks to remain relatively firm amid major
chemical demand start-ups underway and rebound in gasoline demand.
EXECUTIVE SUMMARY
CRUDE AND NAPHTHA CRACKS TO DUBAI REGIONAL NAPHTHA SUPPLY (‘000 B/D)
$/b WTI Dated Brent Japan Naphtha Q1 Q2 Q3 Q4 Aug- Sep-
4 20 20 20 20 20 20
2
China 3301 3818 3811 3716 3758 3725
0
India 1044 755 861 944 859 950
-2
-4
Japan 1271 1060 1120 1199 1086 1121
-6 Korea 1481 1292 1291 1399 1287 1372
-8 Taiwan 384 366 346 375 340 366
-10
-12
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21

Source: Platts Analytics Source: Platts Analytics

 Global crude (Dated Brent) prices fell by an average of $0.65/b in October to $40.15/b as pandemic has taken a turn for
the worse with more lockdowns announced. Rapidly rising Libya barrels, higher stocks are also adding to the bearish
outlook. For 2021, stock draws, Q1 OPEC+ discipline, and US supply declines should support Dated Brent rising towards
PRICE DEVELOPMENT $50/b by end-2021, WTI to $47/b.
 Naphtha cracks rose slightly in October to $2.8/b due to strong demand from ethylene producing steam crackers.
However, naphtha cracks are projected to turn bearish for rest of the year amid major cracker outages. 2021 naphtha
price outlook remains bullish compared to the years past, naphtha-Dubai crack is projected to average $1/b in 2021.

 Regional naphtha supply is projected to recover in Q4 amid higher crude runs despite falling imports from the West.
October supply rose in response to rising demand for petrochemical production in the form of yield shifts for high
paraffin grades. The recovery back to similar levels in 2019 is set to occur in Q2 2021 as the second wave of infections
globally as led to weaker overall demand for oil products and chemicals compared to previous expectations.
SUPPLY
 Arbitrage cargoes from the West to Asia are projected to fall in October/November as demand dwindled in the region.
European domestic for naphtha is also on the rise in the winter months, naphtha arbitrage is seasonally closed on paper
for trade between Europe and Asia. Middle East and US are set to provide these incremental supplies to the Asia players
in Q4, however, minimal volumes are expected.

 Naphtha demand for gasoline blending is set to improve back to 2019 levels by H1 2020 across Asia. However, gasoline
blending demand is projected to remain steady and not improve as much as chemical demand due to high stocks and
major refinery turnarounds. Malaysia is implementing its conditional movement control in November.
DEMAND
 Naphtha petrochemical demand for olefins turned bearish amid major unplanned and planned outages. However
naphtha use is projected to improve amid seasonal price increases for propane and butane due to demand for heating
and gasoline blending applications.

 Ethylene-naphtha spread rose in October averaging at $443/mt, a steep recovery owing to major steam cracker outages
in the Asian markets. The spread is projected to weaken in 2021 due to expected supply glut from major ethylene start-
MARGINS ups. Benzene prices are projected to improve in 2021 as downstream styrene start-ups add much needed demand.
 Reforming margins improved in October, despite demand for octane barrels remaining weak due to drops in naphtha
prices. Gasoline reforming credits may start to improve further in Q4 2020 and Q1 2021.

globaloilanalytics@spglobal.com
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

PRICES

Asian naphtha cracks turned bearish in Q4 amid major ethylene unplanned

turnarounds leading to lower naphtha imports demand.
 Global crude (Dated Brent) prices fell by an average of $0.65/b in October to $40.15/b as the pandemic has taken a turn for the
worse over the past month, especially in the US, France, and Germany. Lockdowns are in affect across major European markets
Rising Libyan supply and potential for a warm winter also add to bearish factors. Dated Brent prices are projected to average $39-
40/b in November and December. WTI averages at $38/b and $39/b, respectively. For 2021, stock draws, 1Q OPEC+ discipline, and
US supply declines should support Dated Brent rising towards $50/b by end-2021, WTI to $47/b.

 The Singapore 92 RON crack spread versus Dubai is trading at about $2.50/b lately. Gasoline cracks are expected to hover at the
lower end of the five-year band over the final months of the year. Singapore's onshore light distillate stocks (which include naphtha)
declined significantly towards end October, however increased again in early November, placing them above the top of their
historical range. Q4 2020 Asian demand is expected to gain 200,000 b/d on the quarter, but fall 45,000 b/d year on year, taking the
whole year decline to 525,000 b/d. China’s demand is set to rise 60,000 b/d year on year in Q4 2020. Per Amap.com, vehicle
congestion levels at most Chinese cities are back to pre-COVID levels. An announced extension of movement controls in Malaysia
due to rising COVID cases will dampen near term demand growth. The country’s mobility index reached 133% in Jul-Aug and 126%
in Sept. but averaged 90% in Oct. Typhoons recently hammered Asia. Heavy rains and floods impacted several countries
(Philippines, Vietnam, others), weakening local demand.

 Asian naphtha demand is expected to improve by 144,000 b/d month on month in November, however, remain 329,000 b/d below
the levels seen in 2019 for the same month. Japan naphtha cracks (vs Dubai) improved to $2.8/b rising demand from ethylene
crackers amid plant start-ups in the region in October. However, major ethylene outages are projected to narrow the crack. The
outlook for ethylene margins in Asia remains bullish in Q4 due to cracker maintenance in South Korea and Singapore, with supply
expected to remain tight, while demand from the construction and polymer sectors was likely to be healthy.

JAPAN NAPHTHA CRACK VS DUBAI GASOLINE CRACK VS DUBAI AND GASOLINE-NAPHTHA

$/b $/b Japan Gasoline 91 Crack Japan Gasoline 91 - Naphtha
4 18
16
2
14
0
12
-2 10
-4 8
6
-6
4
-8 2
-10 0
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-19 Jun-19 Nov-19 Apr-20 Sep-20 Feb-21 Jul-21 Dec-21
Source: Platts Analytics Source: Platts Analytics

PETCHEM PRICES

Olefins sector margins set to remain bullish in Q4 amid improving demand

and unplanned outages; Benzene outlook to turn slightly bullish amid
major downstream startups, while paraxylene is projected to remain weak.
 Northeast Asian ethylene prices rose in October by $18/mt, amid major steam crackers turnarounds and improving downstream
demands. The spread between ethylene and naphtha rose to $443/mt on tight supply. South Korea's LG Chem has shut its
naphtha-fed steam cracker and downstream units in Yeosu after a fire broke out at the plant early November. The shutdown of
the steam cracker weighed on the Asian naphtha market, as the unit uses around 9,000-10,000 mt/day of naphtha feedstock.
The company's steam cracker in Yeosu is able to produce 1.18 million mt/year of ethylene and 550,000 mt/year of propylene. LG
Chem also shut its 145,000 mt/year butadiene unit at the same location following the steam cracker shutdown. The cracker
supplies crude C-4 feedstock to the butadiene unit. LG Chem also has a naphtha-fed steam cracker at Daesan, which is able to
produce 1.27 million mt/year of ethylene and 650,000 mt/year of propylene.

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 2
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

 Asia’s PE deficit is expected to average close to 1.5 million mt per month in Q4. Uncertainty surrounds the global polyethylene
market after the coronavirus pandemic curbed demand. New PE supply conditions post COVID-19 were in question following
potential delays to planned expansions in 2020 to 2021 from weaker demand. In plant news, Siam Cement Group Chemicals’
polymer subsidiary, Thai Polyethylene, is planning to take its PE unit offline in November during a turnaround at the group’s Map
Ta Phut steam cracker in Thailand. The steam cracker maintenance work is expected to run from Nov. 2 to Dec. 16, with its polymer
subsidiaries to shut for a shorter duration of 30-35 days after the cracker shuts.

 The Asian the paraxylene (PX) deficit is estimated at 340,000 mt per month in November. China’s Yisheng Petrochemical plans to
shut its 3.75 million mt/year purified terephthalic acid (PTA) line at Dalian for two-week maintenance since early-November.
Chinese PTA market sentiment remains largely bearish amid high stocks, and the recent startup of Xinfengming Group’s 2.2 million
mt/year new PTA line since mid-October will add further pressure on the supply side. Japan’s ENEOS announced that in October
2021 it would shut its Chita refinery, which has 400,000 mt/year of PX capacity. "We have been considering it since April 2017 as
part of our continuous consideration for restructuring our system," ENEOS executive vice president Junichi Iwase said at the press
conference. "Our decision came after we judged that the Chita plant will structurally be in the red amid the bearish PX market," said
Iwase, adding that the market was impacted by the coronavirus pandemic. PX producers have been battling eroding margins since
early 2019, when China began to add domestic PX capacity in a bid for greater self-sufficiency. The PX-naphtha spread, which was
hovering in the range of $250-$260/mt in November 2019, has narrowed sharply in 2020 in $150/mt due to the additional PX
capacity coming online within China and the rise in COVID-19 cases hitting demand. Oman’s OQ is expected to shut its 820,000
mt/year PX plant in November amid continuing unfavorable production margins and a hit to demand due to the coronavirus
pandemic.

NORTHEAST ASIA ETHYLENE PRICES AND DIFFERENTIALS NORTHEAST ASIA PARAXYLENE PRICES AND DIFFERENTIALS

$/mt Ethylene-Naphtha Ethylene $/mt Paraxylene-Naphtha Paraxylene

1,400 1,200

1,200 1,000
1,000
800
800
600
600
400
400

200 200

0 0
Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-19 Jun-19 Nov-19 Apr-20 Sep-20 Feb-21 Jul-21 Dec-21

Source: Platts Analytics Source: Platts Analytics

REFORMING & AROMATICS MARGIN

Naphtha reforming improve yet remain weak amid poor octane blend
demand in the region and historically low aromatics price complex. Outlook
for blending demand remains bullish remainder of 2020.
 Reforming margins improved although remained close to parity in October due to stagnant octane value1. Margins remained weak
in 2020 primarily due to historic lows in octane value as gasoline demand dwindled. As gasoline inventories continue to set record
highs in the region, demand for octane boosters fell in October. Singapore's onshore light distillate stocks (which include naphtha)
declined significantly towards end October but increased again early November, placing them above the top of their historical
range.

 Naphtha reforming rose slightly in October to $1.39/b or $12.5/mt and the combined naphtha reforming and aromatics extraction
margins rose slightly to $0.5/b. The differential between gasoline reforming and reforming-aromatics extraction margins had
fallen to minus $0.89/b, a $1.07/b fall from the previous month. The PX market margins remained stagnant as prices hovered at
$540/mt. As the gasoline market strengthened relatively, aromatics extraction lost its advantage over reformate blending.
Benzene demand has significantly improved due to major styrene plant start-ups and improving end-product demand for
polystyrene and ABS. As gasoline demand improves, it is expected that gasoline reforming margins will gain in Q1 2021, reducing

1
The value of an octane point is determined as (Singapore RON 95 Gasoline Price – Singapore RON 92 Gasoline Price)/3

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 3
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

the differential between gasoline reforming and reforming-aromatics extraction margins. The aromatics margins are expected to
remain weak in Q4 amid new capacity builds lead to surplus woes.

 Integrated condensate topping (splitting), reforming and aromatics extraction margins dropped slightly, falling by an average of
$1.86/b in October as prices of condensates rose marginally. The complete topping, reforming price complexes fell in October,
while the condensate prices gained. As such, Indonesian Senipah condensate with a higher middle distillate yield and NWS
condensate which has lower middle distillate yield fell. Potential for more condensate processing does exist in Q4 as gasoil and
kerosene prices are expected to improve as global demand improves.

NAPHTHA REFORMING AND AROMATICS MARGINS CONDENSATE TOPPING-REFORMING-AROMATICS MARGINS

$/b R.Margins RA.Margins $/b NWS

18 20
Senipah
16 18
14 16
12 14
10
12
8
10
6
8
4
2 6
0 4
-2 2
-4 0
Nov-18 Mar-19 Jul-19 Nov-19 Mar-20 Jul-20 Jan-18 Jun-18 Nov-18 Apr-19 Sep-19 Feb-20 Jul-20

Source: Platts Analytics Source: Platts Analytics

REGIONAL SUPPLY AND DEMAND

November Asia naphtha supply set to improve amid higher refinery runs
relative to October despite lower imports into the region. Q1 2021 demand
seen improving amid steady straight run naphtha gasoline blending
requirements and new ethylene plant start-ups.
 Northeast Asia overall naphtha supply in October is ASIA NAPHTHA SUPPLY
estimated to have stayed steady, remaining 6.5 million b/d million b/d Japan Korea Taiwan China India
for the month as higher crude runs negated lower imports. 9
Crude runs and naphtha output have been growing in H2.
8
As such, Major Asian countries’ naphtha output in Q4 is
7
expected to improve 2% compared to the previous
quarter. 6
5
 Asian naphtha demand was supported by steam cracking 4
demand in October as gasoline blending demand 3
witnessed only a marginal gain. The pandemic has
2
weighed heavily on demand for gasoline and jet fuel.
Gasoline demand, on the one hand, has rebounded 1
strongly with the opening of economies and higher use of 0
Nov-18

Nov-19
Jul-18

Jul-19

Jul-20
May-18

May-19

May-20
Sep-18

Sep-19

Sep-20
Jan-18
Mar-18

Jan-19
Mar-19

Jan-20
Mar-20

private vehicles as commuters avoided public transport as

a result of the coronavirus. The weighted mobility index for
Asia (excluding China) recovered to pre-COVID levels since
August before flattening. Asian Q4 2020 demand is forecast to increase 310,000 b/d on the quarter and up 25,000 b/d year on year

 Overall Northeast Asian naphtha supply in October is expected to have grown to 6.6 million b/d. Demand for gasoline blending is
on a road to recovery as transportation sectors re-open across the Asian markets amid the COVID-19 outbreak. Petrochemical
demand will likely continue to pick up in Q4 with plants returning from turnaround and also naphtha remaining as a more economic
feedstock. However, naphtha imports to the region are expected to fall in November due to limited availability of product from
Western markets.

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 4
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

JAPAN

Naphtha supply projected to recover back to 2019 levels in Q2 2021 as

refinery runs recover gradually.
 Japan’s crude runs fell in September and continue to set new historic lows due to weaker demand. October crude runs witnessed
a further dip due to refinery outages. Crude runs were at 2.32 million b/d and 2.28 million b/d, dropping by 22% year on year and
13% year on year respectively for the same months last year. Crude runs continued to trend close to historical lows at 2.38 million
b/d for the first week of November. ENEOS Negeshi restarted a 150,000 b/d CDU on October 27, and plans to restart its other
120,000 b/d CDU in early November. Seibu Oil, a subsidiary of Idemitsu Kosan, restarted its 120,000 b/d Yamaguchi refinery. Cosmo
Yokkaichi refinery (86,000 b/d) is scheduled to return soon, and ENEOS Wakayama (127,500 b/d) will remain under maintenance
until early December.

 Japan's crude imports retreated in September to the lowest level for the month in 53 years after having risen month on month in
August during the country's summer holiday season, showing that it would remain at a multi decade level for the rest of the year
amid a slow oil demand recovery from the coronavirus pandemic. September crude imports came in at 2.14 million b/d, the lowest
for the month since 1967. The September crude imports dropped 22.6% year on year and 9.3% month on month, after making a
13% month-on-month increase in August during the country's peak summer oil demand. Japan's crude oil imports will likely remain
at the current state until the end of 2020 amid the country's slow oil demand recovery from the coronavirus pandemic.

 Japan's crude imports from its top supplier Saudi Arabia slid 12.6% year on year at 862,669 b/d in September, which accounted for
40.3% of total imports in the month. The Saudi Arabian crude imports include the half of an intake of 296,809 barrels of Khafji
crude from the Neutral Zone, where the output is shared equally with Kuwait, marking the first import of the crude known as a
popular coker feed since November 2014. Crude imports from the UAE, Japan's second largest supplier, dropped 18.6% year on
year at 672,500 b/d in September, while imports from Kuwait -- the third largest supplier for the month -- plunged 39.9% on the
year at 176,271 b/d, including the remaining half of the Khafji crude.

JAPAN'S CRUDE RUNS JAPAN'S NAPHTHA SUPPLY

Range 2015-2019 2019 Range 2015-2019 2019
'000 b/d Avg 2015-2019 2020 '000 b/d Avg 2015-2019 2020
2021 2021
3,800 1,600
3,600 1,500
3,400 1,400
3,200
1,300
3,000
1,200
2,800
1,100
2,600
2,400 1,000

2,200 900
2,000 800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: METI, Platts Analytics Source: METI, Platts Analytics

 Naphtha imports fell in September amid lower demand for gasoline blending. Despite low imports, stock builds were also seen in
September due to weak demand. As petrochemical demand remained flat and projected to improve towards year end, Japan’s
naphtha imports are expected to remain above historical average levels and are projected to be around 523,000 b/d in Q4 and
487,000 b/d for 2021.

 Japan’s naphtha petrochemical demand remained flat in September and continues to trend at five-year lows. Naphtha stocks rose
in September to 8.58 million b/d on average, 5% lower year on year. Japan's steam cracker operating rates in September averaged
92.8% compared with 91.8% in August and 93.2% a year earlier. Japan's steam cracker operations will likely increase towards the
end of this year as major planned turnarounds ended in October. Japan's Idemitsu restarted its naphtha-fed steam cracker in
Tokuyama around end-October after annual maintenance that lasted two months. The cracker, which was shut on Sept. 8, is able
to produce 623,000 mt/year of ethylene and 450,000 mt/year of propylene. The aromatics plant at the same site is able to produce
274,000 mt/year of benzene, 130,000 mt/year of toluene, 317,000 mt/year of xylene and 200,000 mt/year of PX. Idemitsu also has
its 120,000 mt/year No. 1 styrene monomer plant and 220,000 mt/year No. 2 SM plant at the site.

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 5
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

JAPAN'S NAPHTHA IMPORTS JAPAN'S NAPHTHA PETCHEM DEMAND

Range 2015-2019 2019 Range 2015-2019 2019
'000 b/d Avg 2015-2019 2020 '000 b/d Avg 2015-2019 2020
2021
650 2021
1,050
600 1,000

550 950
900
500
850
450 800

400 750
700
350
650
300 600
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: METI, Platts Analytics Source: Platts Analytics

 Gasoline production set a new five-year low in September despite rising by 5,000 b/d compared to production levels in August.
October gasoline dropped 7% to 737,000 b/d based on preliminary data. Gasoline exports dropped 54.2% on the year to 15,008 b/d
in September at a time when Japan became a net importer of the product for the sixth consecutive month because of the major
refinery run cuts. Japan imported an average 38,399 b/d of the motor fuel, while it exported 15,008 b/d. The September gasoline
imports, however, dipped 1% year on year and dropped 55.2% from August when Japan's summer driving season peaks.

 Both gasoline blending and petrochemical feedstock demand for naphtha are estimated to have dropped in September. Domestic
naphtha production is estimated to have improved in October. Steam cracking demand for light naphtha is expected to improve
further in Q4. Demand for heavy naphtha reforming and aromatics extraction is trending higher in Q4 with reformer utilization
improving to around 69%.

JAPAN'S GASOLINE PRODUCTION JAPAN'S NAPHTHA DEMAND DISPOSITIONS

Range 2015-2019 2019 '000 b/d Reformed Naphtha Blending Direct Naphtha Blending
'000 b/d Avg 2015-2019 2020 Aromatics Extraction Steam Cracking
2021 1,600 Solvent Naphtha Others
1,100
1,400
1,000 1,200
1,000
900
800
800
600
700 400
200
600
0
Nov-19
Nov-20
Feb-19
Feb-20

Jul-19
Jul-20

Dec-19
Dec-20
Apr-19
Apr-20
May-19
May-20

Oct-19
Oct-20
Jun-20
Jun-19

Aug-19
Aug-20
Sep-19
Sep-20
Jan-19
Jan-20

Mar-19
Mar-20

500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: METI, Platts Analytics Source: Platts Analytics

KOREA

Naphtha demand for chemical production drops amid major ethylene

cracker outages, 2021 demand outlook remains bullish.
 Crude runs fell in September to around 2.55 million b/d according to estimates and crude runs are expected to have improved
October. South Korea imported 10.631 million mt of crude oil in September, down 1.8% from a year. For the first nine months of this
year, South Korea's crude imports dipped 8% year on year to 742.22 million barrels. This is despite the sharp decline in the country's
stockpile of crude oil and refined products. South Korea's crude stockpile had declined 10.3% year on year to 41.94 million barrels
as of end-August, compared with 46.77 million barrels a year ago. Its overall stockpile of refined oil products slipped 0.2% year on
year to 69.68 million barrels as of end-August, compared with 69.8 million barrels a year ago.

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 6
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

 South Korea would heavily favor Saudi crude oil over US or other arbitrage barrels for the rest of the year as local refiners find their
staple medium sour Middle Eastern crude to be the most viable and economical feedstock option in times of volatile refining
margins and tepid consumer fuel demand. South Korea made rigorous efforts to diversify its crude import sources over the past
several years, with the share of Middle Eastern crude in its yearly procurement basket falling below 71% in 2019, compared with
more than 85% in 2015. However, Asia's fourth biggest oil consumer made a U-turn on its refinery feedstock diversification strategy
in 2020. South Korea's crude imports from Saudi Arabia in September climbed 8.3% from a year earlier at 23.1 million barrels.

 Korea’s September naphtha supply improve slightly due to rising import volumes while crude runs fell. Naphtha supply is expected
to be on a general bullish trend heading into 2021 due to higher refinery runs and import volumes. Korea’s naphtha supply may
improve to 1.32 million b/d in Q4 and 1.43 million b/d in 2021.

KOREA'S CRUDE RUNS KOREA'S NAPHTHA SUPPLY

Range 2015-2019 2019 Range 2015-2019 2019
'000 b/d Avg 2015-2019 2020 '000 b/d Avg 2015-2019 2020
2021 2021
3,300 1,700
3,200 1,600
3,100
1,500
3,000
2,900 1,400

2,800 1,300
2,700
1,200
2,600
1,100
2,500
2,400 1,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: KEEI, Platts Analytics Source: KEEI, Platts Analytics

 Naphtha imports rose to 528,000 b/d in September, a new five year low for the month of September. Arbitrage from the West
remained closed in October leading drop in imports into the Asia markets. Typically the naphtha arbitrage from Europe into Asia is
closed in winter months, as naphtha cracking in Europe turns more profitable compared to LPG cracking leading to lesser volumes
of trade.

 Petrochemical demand improved slightly in September and is projected to have dropped significantly in October/November amid
major ethylene outages. Naphtha petrochemical demand forecast at around 1.14 million b/d through Q4 2020 and 1.3 million b/d in
2021. LG Chem has shut its naphtha-fed steam cracker and downstream units in Yeosu after a fire broke out at the plant early
November. The shutdown of the steam cracker weighed on the Asian naphtha market, as the unit uses around 9,000-10,000
mt/day of naphtha feedstock. The company's steam cracker in Yeosu is able to produce 1.18 million mt/year of ethylene and
550,000 mt/year of propylene.

KOREA'S NAPHTHA IMPORTS KOREA'S NAPHTHA PETCHEM DEMAND

Range 2015-2019 2019 Range 2015-2019 2019
'000 b/d Avg 2015-2019 2020 '000 b/d Avg 2015-2019 2020
2021 2021
850 1,500

800
1,400
750
1,300
700

650 1,200

600
1,100
550
1,000
500

450 900
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: KEEI, Platts Analytics Source: Platts Analytics

 South Korean refiners produced 10.89 million barrels of gasoline in September, down 22.1% on the year and 11.7% on the month.
Gasoline demand also jumped 20% year on year to 6.905 million barrels in September, compared with a 14.2% decline in August.

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 7
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

Auto fuels demand may have risen due to the increased number of people opting to drive their own cars overtaking public transport
due to infection concerns. For the first nine months, however, gasoline demand fell 2.4% year on year at 60.16 million barrels.

 Overall naphtha demand rose to around 1.29 million b/d in September mainly due to slight increase in petrochemical demand. Total
demand is expected to rise in Q1 2021 due to stronger gasoline demand and chemical plants returning from planned turnarounds.
Reformers are expected to be running at close to 92% utilization to fulfil both gasoline and aromatics extraction demand. Steam
cracker demand for naphtha feedstock is expected to be lower in October/November compared to September.

KOREA'S GASOLINE PRODUCTION KOREA'S NAPHTHA DEMAND DISPOSITIONS

Range 2015-2019 2019 '000 b/d Reformed Naphtha to Blending Direct Naphtha Blending
'000 b/d Avg 2015-2019 2020 1,800 Aromatics Extraction Naphtha Steam Cracker Naphtha
2021 Solvent Naphtha
550 1,600
1,400
500
1,200
1,000
450
800

400 600
400
350 200
0

Nov-20
Nov-19
Feb-19
Feb-20

Jul-19
Jul-20

Oct-20

Dec-19
Dec-20
Apr-19
Apr-20

Oct-19
May-19
May-20
Jun-19
Jun-20

Aug-19
Aug-20

Sep-20
Sep-19
300

Jan-19
Jan-20

Mar-19
Mar-20
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: KEEI, Platts Analytics Source: Platts Analytics

TAIWAN

Naphtha supply remained fell in Q3 owing to low crude runs. Overall supply
projected to improve 8% in Q4 compared to Q3.
 Taiwan’s crude runs fell by 6.8% from July to 612,000 b/d in August due to refinery maintenance. Refinery utilization averaged
56.1% in August, continuing the downtrend from 60.2% in July, 69.1% in June and 71.9% in May, based on Taiwan's total refining
capacity of 1.09 million b/d. The private refiner Formosa had been running its 540,000 b/d refinery in Mailiao at 60% of capacity
after the No. 2 residue desulfurization unit was hit by fire on July 15. Operations fell further following the turnaround at its RDS and
residue fluid catalytic cracker. The plant was running at 160,000 b/d, or around 30% of capacity, as of Oct. 11 and plans to raise
operations to 220,000-230,000 b/d on average in October.

 Taiwan’s naphtha supply fell significantly in August due to both low crude runs and imports, bringing the total supply to around
340,000 b/d, remaining below the historical five-year band. Crude runs are expected to be at 900,000 b/d through Q4, amid
recovering oil products demand. Variation in naphtha supply will depend on naphtha imports and downstream petrochemical
demand.

TAIWAN'S CRUDE RUNS TAIWAN'S NAPHTHA SUPPLY

Range 2015-2019 2019 Range 2015-2019 2019
'000 b/d Avg 2015-2019 2020 '000 b/d Avg 2015-2019 2020
2021 2021
1,050 600
1,000
550
950
900 500
850
450
800
750 400
700
350
650
600 300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: BOE, Platts Analytics Source: BOE, Platts Analytics

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 8
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

 Taiwan’s naphtha net imports fell to 181,000 b/d in August. Taiwan's Formosa's No. 3 steam cracker has resumed full operations
less than a week after completing scheduled maintenance in early October. The cracker was operating at around 80% of capacity
after its restart on Sept. 29. Most Asian steam crackers are currently keen to operate at full or close to full capacity due to positive
olefin margins. The cracker commenced the turnaround on Aug. 11, and has an ethylene production capacity of 1.2 million mt/year.
The company operates three naphtha-fed steam crackers at Mailiao with a total ethylene production capacity of 2.93 million
mt/year.

 Taiwan’s naphtha petrochemical feedstock demand fell in August amid planned maintenances. Naphtha demand is projected to
improve as steam crackers increase the naphtha composition of their feed as the discount to LPG remains negative. Naphtha
demand as a petrochemical feedstock for ethylene production is projected to recover seasonally through year end. However,
naphtha use into aromatics extraction is projected to weaken further aromatics continue to face poor margin environment owing
to global supply glut.

TAIWAN'S NAPHTHA NET IMPORTS TAIWAN'S NAPHTHA PETCHEM DEMAND

Range 2015-2019 2019 Range 2015-2019 2019
'000 b/d Avg 2015-2019 2020 '000 b/d Avg 2015-2019 2020
2021 2021
400 450

350 400
300
350
250
300
200
250
150

100 200

50 150
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: BOE, Platts Analytics Source: Platts Analytics

 Taiwan's gasoline production fell 14.5% in August compared to July, totaling 162,000 b/d. Gasoline production continues to set new
five year lows for the seventh consecutive month. Production is projected to improve significantly in Q4 as refineries return from
turnarounds.

 Overall naphtha demand fell in August, dropping to 321,000 b/d due to higher gasoline blending demand and chemicals. Naphtha
demand for aromatics extraction did fall in August based on projections. Reformer operations are expected to move down to close
to 85% utilization. Average aromatics extraction operating rates are expected to fall in Q4, decreasing reforming demand.

TAIWAN'S GASOLINE PRODUCTION TAIWAN'S NAPHTHA DEMAND DISPOSITIONS

Reformed Naphtha to Blending Direct Naphtha Blending
Range 2015-2019 2019 '000 b/d
'000 b/d Aromatics Extraction Naphtha Steam Cracker Naphtha
Avg 2015-2019 2020 600
Solvent Naphtha
2021
290
500
270
400
250
300
230

210 200

190 100
170
0
Nov-19
Nov-20
Jul-19
Jul-20

Dec-19
Dec-20
Feb-19
Feb-20

Apr-19
Apr-20

Oct-20
May-19
May-20
Jun-19
Jun-20

Oct-19
Aug-19
Aug-20
Mar-20
Jan-19
Jan-20

Mar-19

Sep-19
Sep-20

150
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: BOE, Platts Analytics Source: Platts Analytics

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 9
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

CHINA

Naphtha supply trending lower in Q4 lower imports and relatively weaker

crude run outlook; bullish gasoline and petrochemical demand outlook to
continue to push naphtha cracks higher in 2021.
 China’s crude runs came in at slightly less than 13.99 million b/d in September – this was up by a mere 51,000 b/d year on year and
down against the 14.21 million b/d booked in August. In fact, the month-on-month decline of 218,000 b/d has been increasing in
magnitude since July, when runs in the country first registered a sequential fall, after reaching a peak of 14.33 million b/d in June.
A slowdown in China’s crude processing volumes was within expectations, as previous (May to August) growth levels at 10% year
on year or more than a million b/d every month cannot be backed by neither product exports, which averaged at only 636,000 b/d
over the period, close to half of what was delivered in the prior 12 months, nor by improvements in the economy/industrial activity.
While there was a slight increase in product outflows in September, particularly for gasoil, they were still down by 20% year on
year.

 According to data from various surveys, crude runs by the independent refineries in Shandong fell by 8,000 b/d in September, the
first year-on-year decline since March due to the factors mentioned above, while the NOCs saw their volumes fall by a larger
295,000 year-on year as fewer export opportunities and bloated product stocks offset runs from Sinopec’s new 200,000 b/d
greenfield Zhangjiang refinery, whose utilization came in at 77% during the month. The relatively new mega refineries - Hengli and
Zhejiang Petrochemical, also saw their crude runs increase by 221,000 b/d year on year to 815,000 b/d, though this too had fallen
from a high of around 1 million b/d in May and June, when the floor on product prices at $40/b crude was effective.

 Naphtha production from refineries and imports fell in September as such China’s net naphtha supply fell slightly to 3.75 million
b/d in September. This marks the first time since April this year that naphtha supply witnessed year on year drop for the month
marking that overall domestic demand has weakened in line with global markets.

CHINA'S CRUDE RUNS CHINA'S NAPHTHA SUPPLY

Range 2015-2019 2019 Range 2015-2019 2019
'000 b/d Avg 2015-2019 2020 '000 b/d Avg 2015-2019 2020
2021 2021
16,000 4,500

15,000
4,000
14,000

13,000 3,500

12,000 3,000
11,000
2,500
10,000

9,000 2,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: NBS, Platts Analytics Source: NBS, Platts Analytics

 China’s naphtha imports fell to 156,000 b/d in September. On annual basis, naphtha imports will likely rise by 15% year on year to
200,000 b/d this year. China’s naphtha demand was around 3.76 million b/d in September, slightly lower than August, in line with
moderating ethylene margins and weak demand from the aromatics chain. A growing number of steam crackers will support
further naphtha use. A combined of nearly 3 million mt per year of ethylene cracker capacity have come on steam over the past
two months and as they ramp up operations, so will their feedstock demand. Additional downstream polymer consumption is also
projected to increase steadily through to the end of the year, reflecting better industrial production growth.

 While the Chinese polyester sector was running at relatively high levels in October, margins of upstream PX and also PTA have
narrowed, and this will put a cap on the operating rates of the domestic naphtha-fed PX units. In-line with the above expectations,
we now expect demand for naphtha to be 3.7 million b/d in Q4 and 4.1 million b/d in 2021. Downstream polymer demand is projected
to continue to show steady improvement in H2 as industrial production reached 2019 levels for June and has since dropped. Overall,
industrial production is projected to show year-on-year gains for Q4 barring pressure on export requirements to the West.

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 10
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

CHINA'S NAPHTHA IMPORTS CHINA'S NAPHTHA PETCHEM DEMAND

Range 2015-2019 2019 Range 2015-2019 2019
'000 b/d Avg 2015-2019 2020 '000 b/d Avg 2015-2019 2020
2021 2021
350 3,200

300 3,000
2,800
250
2,600
200 2,400
150 2,200
2,000
100
1,800
50 1,600
0 1,400
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: NBS, Platts Analytics Source: Platts Analytics

 Gasoline demand moderated to 3.61 million b/d in September, as it came in slightly lower than 3.63 million b/d reported in August.
Despite this, demand for the fuel still rose by 2% on year. Much of this is driven by normalizing road traffic and preference among
people to travel in their own vehicles. Road traffic congestion in major cities have been hovering around 0.1-0.2 points below their
past four year averages during the month. The decline is reasonable even without COVID-19, as this has been the case over the
past couple of years due to development of public transport, road expansions and restrictions on road travel, as authorities attempt
to manage road congestion in these areas. The congestion level in Beijing was down by 0.17 points year on year in 2019, while that
in Shanghai was lower by 0.15 points during the same period, according to Amap.com. Even in Qingdao, which was recently hit by
COVID-19, we did not observe much changes in vehicle flow as the local government was quick to stem a surge in cases through
widespread testing. Although intracity road traffic has broadly recovered post the pandemic, the same cannot be said long-haul
road travel, as highway passenger turnover remained some 39% below 2019 levels. Additionally, although the overall highway
traffic during the National Day holiday did normalize, it fail to exceed levels seen last year, according to the Ministry of Transport.

 China’s passenger car sales grew by 8% year-on-year, or a fifth straight month to 2.09 million units in September. However, the
recent rebound on sales did not compensate for heavy losses in Q1 and overall sales over the first nine months of the year was still
12.3% lower compared to the same period of last year. Even if the current momentum of 2 million units of sales per month were to
be maintained in Q4, sales would still down 10% year on year for the whole of 2020. It is interesting to note that much of the recent
rebound in passenger car sales came from sedans with cylinder capacity ranging from 1.6 to 2 liter, due to robust demand for the
family car and this is a reflection of rising preference among people to drive their own vehicles. As a result, even as traffic flow
normalizes, we still expect China’s gasoline demand to come in at 3.68 million b/d in Q4, down by 2% on year. Our Q1 2021 demand
forecast is at 3.64 million b/d, up by 33% year on year due to a low base this year.

CHINA'S GASOLINE PRODUCTION CHINA'S NAPHTHA DEMAND DISPOSITIONS

Range 2015-2019 2019 Other Solvent Naphtha
'000 b/d Avg 2015-2019 2020 '000 b/d Steam Cracker Naphtha Aromatics Extraction Naphtha
2021 Direct Naphtha Blending Reformed Naphtha Blending
4,400 9,000
4,200 8,000
4,000 7,000
3,800 6,000
3,600 5,000
4,000
3,400
3,000
3,200
2,000
3,000
1,000
2,800 0
Nov-19
Nov-20
Feb-19
Feb-20

Jul-19
Jul-20
Apr-19

Dec-19
Dec-20
Oct-20
Apr-20

Oct-19
May-19
May-20
Jun-19
Jun-20

Aug-19
Aug-20
Mar-19

Sep-19
Sep-20
Jan-19
Jan-20

Mar-20

2,600
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: NBS, Platts Analytics Source: Platts Analytics

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 11
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

INDIA

Domestic naphtha supply and demand improve in September due to fourth

phase of reopening of the economy. Demand outlook for 2021 remains
bullish.
 Average capacity utilization for all categories of refineries in India improved to 86% in September from 76% in the previous month.
In April-September, the run rate stood at 80% compared to 100% a year ago, reflecting the overall impact of the lockdown.
Meanwhile, India's demand for oil products fell 4.4% on the year in September to 15.47 million mt, or 4.1 million b/d reflecting weak
economic activity compared to a year ago due to the coronavirus. On a monthly basis, overall oil demand in September rose from
August, the first such rise since June. Oil demand improved 7.2% on the month in September due to the fourth phase of unlocking,
with most of the commercial and industrial activity permitted. In September, state-run refineries recorded an 83% run compared
with 92% a year ago and 74% in August.

 Flagship state-run refiner Indian Oil Corp. recorded an average 81% combined run for all its nine standalone refineries compared
with 91% a year ago and 67% in August. India's No. 2 state-run refiner Bharat Petroleum Corp. Ltd. registered an 84% run in
September compared with 100% a year ago and 75.5% in August. HPCL, India's No. 3 state-run refiner, recorded a run rate of 108%
in September compared with 106.5% a year ago and 98% in August. Private refineries recorded an 89% run in September compared
with 104% a year ago and 79% in August. Private refiners' lower run rate on the year was mainly due to lower processing at a
Reliance-operated export-focused unit.

 Expected increases in refinery run rates, on the back of an uptick in domestic oil product demand toward the end of the year have
spurred purchases of crude oil from Indian refiners in recent weeks. Additional spot crude oil demand have begun to emerge from
Indian refiners with some heard to have made more purchases for December arrival from previous months. India's state-owned
India Oil Corp was heard to have purchased 2 million barrels of West African crude oil grades for December-delivery in a tender this
month, while Bharat Petroleum Corporation Limited was heard to have purchased at least 4 million barrels of various crude oil
grades. Indian refiners are eyeing to raise their run rates in the October-December quarter as demand for diesel and gasoline is
expected to rebound with the easing of movement restrictions and the upcoming festive season.

INDIA'S CRUDE RUNS INDIA'S NAPHTHA SUPPLY

Range 2015-2019 2019 Range 2015-2019 2019
'000 b/d Avg 2015-2019 2020 '000 b/d Avg 2015-2019 2020
2021 2021
5,500 1,200

1,100
5,000

1,000
4,500
900
4,000
800

3,500
700

3,000 600
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: PPAC, Platts Analytics Source: PPAC, Platts Analytics

 Naphtha net exports rose to 150,000 b/d in September as demand from domestic steam crackers and gasoline blending improved.
Naphtha imports in August fell slightly to 33,000 b/d. India’s net exports are expected to improve in Q4 as crude runs rise. India's
naphtha exports rose for the second consecutive month in September to reach a four-month high, led by recovering refinery run
rates. Just 67,000 mt of October-loading naphtha was reportedly sold via public tenders from India, as two tenders were cancelled
by HPCL, and other refiners may have sold their cargoes domestically. Market sources noted HPCL had even booked an LR1 tanker
to lift 55,000 mt of naphtha from Kuwait to Vishakhapatnam and Haldia, loading Oct. 30. Indian refiners are currently offering
November-loading cargoes, of which 92,000 mt was heard sold for export.

 India’s petrochemical demand improved in September due to rising olefin margins. India’s rise in naphtha exports in September
are indicative of higher crude runs. As Asian markets are typically short of higher paraffinic content naphtha, the attractive
premiums tend to lead to higher exports out of the major West Coast based refiners in India.

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 12
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

INDIA'S NAPHTHA NET EXPORTS INDIA'S NAPHTHA PETCHEM DEMAND

Range 2015-2019 2019 Range 2015-2019 2019
'000 b/d Avg 2015-2019 2020 '000 b/d Avg 2015-2019 2020
2021 2021
300 800

250
700

200
600
150
500
100

400
50

0 300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: PPAC, Platts Analytics Source: Platts Analytics

 Indian gasoline output in September hit its highest level in six months, jumping by 10.27% from the previous month as refinery run
rates spiked in reaction to healthier domestic demand for the motor fuel. The month-on-month increase brought total gasoline
output from India to 2.989 million mt in September. It was last higher in March at 3.309 million mt. Indian domestic consumption
of gasoline in September hit a seven-month high of 2.45 million mt, the first time since February that gasoline consumption rose
on a year-on-year basis.

 Indian gasoline output in October and November will continue to trend higher, with major holidays such as the Hindu festival of
Navaratri in the second half of October and Diwali in mid-November prompting strong domestic demand. In 2019, which saw the
respective festivals celebrated in October, Indian domestic consumption of gasoline jumped 7.04% month on month. Driven by the
uptick, Indian gasoline demand is expected to average around 760,000 b/d in the fourth quarter of 2020, up from Q3's average of
700,000 b/d, and slightly higher than 2019's average of around 745,000 b/d. India's Mangalore Refinery and Petrochemicals Ltd.
will continue to operate its refinery at around 60%-70% of capacity in the near term, as poor middle distillate margins put earlier
plans to ramp up rates on hold. The refiner had planned to continue raising run rates to around 75%-80% in October, but have
pushed back plans to later in the fourth-quarter, choosing instead to wait for oil products demand to show improvement across
the barrel.

 India’s total naphtha demand also grew in September primarily due to a rise in demand for petrochemical production and gasoline
blending. Naphtha demand will see an uptick in Q4 with sustained petrochemical demand and some growth in gasoline blending.
Seasonal northern hemisphere demand for LPG heating will strengthen toward year end, which will make naphtha more
competitive as a steam cracker feedstock.

INDIA'S GASOLINE PRODUCTION

INDIA'S NAPHTHA DEMAND DISPOSITIONS
Range 2015-2019 2019
'000 b/d '000 b/d Reformed Naphtha Blending Direct Naphtha Blending
Avg 2015-2019 2020
Aromatics Extraction Naphtha Steam Cracker Naphtha
2021 1,200 Solvent Naphtha Other Naphtha Demand (Fertilizer)
1,000
1,000
900
800

800 600

400
700
200
600
0
Nov-19
Nov-20
Jul-19
Jul-20
Feb-19
Feb-20

Apr-19
Apr-20

Dec-19
Dec-20
Jun-20
May-19
May-20
Jun-19

Oct-19
Oct-20
Aug-19
Aug-20
Jan-19
Jan-20

Mar-19
Mar-20

Sep-19
Sep-20

500
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: PPAC, Platts Analytics Source: Platts Analytics

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 13
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

October arbitrage remained closed for USGC-Japan and NWE-Japan due to

naphtha price drops in Asia amid weaker.
 The clean product freight rate for the USGC to Japan route was at $29/mt on average in October, however, prices witnessed a
steady decline throughout the month. Large drops in Japan naphtha prices led to the closure of the arbitrage in October despite
freight rates falling. Freight rates were valued at $25/mt as of November 5, 2020.

 USGC-Japan naphtha arbitrage fell to minus $10.6/mt on average in October. Although naphtha prices rose marginally in USGC and
a steep drop in Asia naphtha narrowed the spread on paper while the advantage from falling freight was not able to turn the
arbitrage positive. Asian markets were on pace to return to normalcy after the COVID-19 pandemic, strengthening market
fundamentals and accelerating bullish sentiments, however, global demand drops as impacted domestic Asian demand growth.
Arbitrages have experienced some violent fluctuations as naphtha prices remained volatile. The arbitrage was primarily shut due
to spike in freight rates in early May and freight has since declined. Amid concerns about the severity of the virus outbreak, demand
shrinkage continues globally.
USGC-JAPAN NAPHTHA ARBITRAGE USGC-JAPAN FREIGHT
$/mt $/mt
80 100
60 90
40 80
20 70
0 60
-20 50
-40 40
-60 30
-80 20
-100 10
Jan-18 Jun-18 Nov-18 Apr-19 Sep-19 Feb-20 Jul-20 Jan-18 Jun-18 Nov-18 Apr-19 Sep-19 Feb-20 Jul-20
Source: Platts Analytics Source: Platts Analytics

 The clean product freight rate for the Northwest Europe (NWE) route was $26.5/mt on average in October, a drop of $1.5/mt month
on month.The COVID-19 pandemic has significantly impacted the European market, not only with diminished demand, but
lockdowns and movement restrictions have also raised supply-chain concerns. With the Middle East and US competing for Asian
demand, NWE-Japan freight rates fell in the first two weeks of October.

 NWE-Japan naphtha arbitrage opened on paper in September and closed on paper in October, averaging about minus $8.35/mt
for the month. COVID-19 infections worsened in Europe, and measures taken to contain the virus spread have dampened demand
in the region earlier. However, chemicals demand for naphtha use in Europe improved in Q4 as LPG use for ethylene production
became unviable. As such, the arbitrage opportunity remains closed in early November.

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 14
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

NWE-JAPAN NAPHTHA ARBITRAGE NWE-JAPAN FREIGHT

$/mt $/mt
80 70

60 60

40
50
20
40
0
30
-20

-40 20

-60 10
Jan-18 Jun-18 Nov-18 Apr-19 Sep-19 Feb-20 Jul-20 Jan-18 Jun-18 Nov-18 Apr-19 Sep-19 Feb-20 Jul-20

Source: Platts Analytics Source: Platts Analytics

 Japan’s naphtha imports in September fell as Middle Eastern refiners lowered crude runs. Middle East-sourced imports fell to
about 43% of the total with reduced volumes and remained the largest export region into Japan. Asia-based imports rose from
24% in August to 30.5% in September, while North America based imports rose to 7.2% of the total. Cargoes from the rest of
origins, such as Europe, Africa, Oceania and South and Central America, all reported volumes less than 366,000 mt --taking a
combined share of 19% of total September import arrivals. The Asian market outlook is turning bullish although the shutdowns and
maintenance of Asian steam crackers have resulted in some additional supply available in the market. September total imports
may expect a moderate fall but are likely to remain around the historical range bound levels.

 Korea’s naphtha imports in September rose significantly compared to August as imports from regional Asian markets rose
significantly. Middle Eastern naphtha imports’ share fell to 33%. European imports are the second largest origin of Korean naphtha
imports despite the volume dropping to 597,000 mt or 30% share of total imports. US naphtha imports fell to 80,000 mt, taking
4% share in the month totals.

JAPAN NAPHTHA IMPORTS BY REGION KOREA NAPHTHA IMPORTS BY REGION

'000 mt Africa Asia '000 mt Africa Asia
Europe North America Europe North America
2,500 3,500 Oceania South & Central America
Oceania South & Central America
Middle East Middle East
3,000
2,000
2,500
1,500 2,000

1,000 1,500

1,000
500
500

0 0
Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20
Source: Japan Trade Statistics MOF, Platts Analytics Source: Korea Customs Service, Platts Analytics

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 15
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

UNIT MAINTENANCE & SCHEDULED OUTAGES

C2 PX Naphtha* 2020 2021

Start End Duration KTA KTA MB/D Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Taiwan
Linyuan, CPC 8-Nov-19 8-Jan-20 61 380 30 242
Linyuan, CPC 13-Feb-20 13-Apr-20 60 720 57 916 1775 744
Formosa No.2 Steam Cracker 1-Jun-20 5-Jun-20 4 1030 82 328
Linyuan, CPC 2-Jul-20 4-Jul-20 2 380 30 60
Formosa No.3 Steam Cracker 11-Aug-20 29-Sep-20 49 1200 95 2004 2768
Linyuan, CPC 17-Aug-20 13-Oct-20 57 360 37 550 1100 476
South Korea
SK Global Chemical 29-Feb-20 9-Apr-20 40 400 41 41 1262 367
Lotte Chemical Daesan 4-Mar-20 13-Dec-20 284 1100 87 2450 2625 2712 2625 2712 2712 2625 2712 2625 1137
Hyundai Cosmo Petrochemical 8-Apr-20 23-May-20 45 380 39 890 890
Hanwha Total 7-May-20 21-Jun-20 45 760 77 1934 1625
Lotte Petrochemical 11-Jul-20 31-Aug-20 51 525 53 1122 1657
YNCC 10-Aug-20 25-Aug-20 15 30 3 46
Lotte Petrochemical 31-Aug-20 30-Sep-20 30 250 25 25 764
YNCC 7-Sep-20 24-Sep-20 17 160 16 277
SK Global Chemical 17-Oct-20 16-Nov-20 30 660 52 787 840
YNCC 20-Oct-20 19-Dec-20 60 580 46 554 1384 877
Japan
Idemitsu Kosan 27-Dec-19 6-Jan-20 10 374 30 178
Asahi Kasei Mitsubishi Chemical 14-Jan-20 28-Jan-20 14 496 39 552
Mitsubishi Gas Chemical 31-Jan-20 31-Mar-20 60 350 36 36 1033 1105
JXTG Nippon Steam Cracker 29-Feb-20 24-Apr-20 55 404 32 32 996 771
Tosoh Japan 15-Mar-20 15-Apr-20 31 527 42 671 629
Mitsubishi Chemical Kashima 1-May-20 1-Aug-20 92 526 42 1297 1255 1297 42
Maruzen Chiba 1-May-20 13-Jul-20 73 550 44 1356 1312 569
Mitsui Chem 1-Jun-20 30-Jun-20 29 450 36 1038
Idemitsu Kosan 8-Sep-20 31-Oct-20 53 623 50 1189 1536

Sub Total Naphtha Capacity/Demand Loss (MB) 1008 2022 8259 6026 8190 8183 5761 7037 8722 6066 4849 2014 0 0 0 0

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 16
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

C2 PX Naphtha* 2020 2021

Start End Duration KTA KTA MB/D Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
India
Haldia Petrochemical Ltd 24-Mar-20 25-Apr-20 32 670 53 426 1332
ONGC Mangalore Petrochemicals Ltd. 1-Apr-20 17-Aug-20 138 900 92 1599 1652 1599 1652 906
China
Fushun Petrochemical 25-Nov-19 15-Jan-20 51 800 64 954
Fuhaichuang Petroleum and Petrochemical 14-Dec-19 29-Feb-20 77 800 81 2525 2362
Sinopec Hainan 13-Jan-20 27-Feb-20 45 1000 102 1833 2749
CNOOC & Shell Huizhou 15-Mar-20 4-Apr-20 20 1200 95 1527 382
Sinopec Sabic Tianjin Petrochemical Co. 1-May-20 11-Jul-20 71 1000 80 2466 2386 875
Qingdao Lidong Chemical Co., Ltd. 3-Aug-20 2-Sep-20 30 1000 102 2952 204
Philippines
Batangas JG Summit Petrochemical Corp 1-Oct-19 27-Jan-20 118 320 25 687
Batangas JG Summit Petrochemical Corp 30-Mar-20 29-Apr-20 30 480 38 76 1107
Thailand
PTT Global Chemicals 23-Dec-19 12-Jan-20 20 1000 80 954
PTT Global Chemicals No.1 Steam Cracker 20-Jan-20 29-Feb-20 40 515 41 451 1188
PTT Global Chemicals No.2 Steam Cracker 23-Jan-20 1-Mar-20 38 400 32 255 923 32
PTT Global Chemicals Aromatics Complex 4-May-20 24-May-20 20 765 78 1558
PTT Global Chemicals 5-Jul-20 31-Jul-20 26 540 55 1429
Map Ta Phut Olefins Co 2-Nov-20 16-Dec-20 44 900 72 2076 1145
Malaysia
Lotte Chemical Titan 1-Mar-20 31-Mar-20 30 520 41 1282
Pengerang Refining and Petrochemical 15-Mar-20 28-Feb-21 350 1300 103 1654 3102 3205 3102 3205 3205 3102 3205 3102 3205 3205 2895
Singapore 795 2386
ExxonMobil 20-Sep-20 30-Oct-20 40 1000 80

Total Naphtha Capacity/ Demand Loss (MB) 8667 9244 13257 13548 17071 15270 12923 14100 12823 11658 10027 6365 3205 2895 0 0

*Estimated equivalent naphtha demand impact

© 2020 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 17
ASIA NAPHTHA MONTHLY NOVEMBER 9, 2020

OTHER RELEVANT REPORTS

Japan Weekly Charts U.S. Rig Monitor

Asia-Pacific Oil Market Forecast China Oil Market Forecast

Tracking the Asian Economies Asia-Pacific Weekly Recap

Global Oil Products Scorecard

ASIA NAPHTHA MONTHLY OUTLOOK

For inquiries related to the oil market, please contact our team: globaloilanalytics@spglobal.com.

Singapore
Eshwar Yennigalla
JY Lim
Kang Wu
Xiaoshu Wang

Beijing
Jianan Sun

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