Analysis of Key Factors in Mid- and Downstream Naphtha Procurement

2021-09-06

　　At present, a relatively large number of factors influence naphtha downstream customers’ purchasing decisions, primarily including product quality, price, payment terms, and transportation methods.

　　First, in terms of quality, naphtha is produced through a variety of processes, including straight-run naphtha, hydrotreated diesel naphtha, coker naphtha, hydrocracked light naphtha, hydrocracked heavy naphtha, top-cut naphtha, and reformate raffinate. Consequently, the selection of naphtha for specific applications generally follows the principle of “use olefins when olefins are appropriate, and aromatics when aromatics are appropriate.” From a usage perspective, steam-cracking feedstock for ethylene production is typically evaluated based on its PONA composition (paraffins, olefins, naphthenes, and aromatics). Under comparable conditions, a higher paraffin (P) content leads to a higher ethylene yield and makes the naphtha more suitable as an ethylene feedstock; in principle, the paraffin content of cracking feedstock should not be less than 60% by mass. Among these, straight-run naphtha, coker naphtha, hydrocracked light naphtha, top-cut naphtha, reformate raffinate, and hydrocracked tail naphtha can all serve as cracking feedstocks.

　　For combined catalytic reforming and aromatics feedstocks, when evaluating reforming feedstock for aromatics production, the N+2A content is typically used as the assessment criterion. Generally speaking, if the N+A content exceeds 40%, the feedstock can be classified as high-quality reforming feedstock for aromatics production. In practical applications, straight-run naphtha, hydrotreated diesel naphtha, catalytic cracked naphtha, coker naphtha, ethylene抽余油 from steam cracking, condensate oil, and hydrotreated heavy naphtha from hydrocracking can all serve as feedstocks for catalytic reforming.

　　In addition, hydrogenation of naphtha is commonly used in gasoline production; when coupled with a hydrogenation unit, aromatization can accommodate a wide range of feedstocks, including straight-run naphtha, coker naphtha, and condensate oil; while light olefin isomerization typically uses reformate overheads and reformate raffinate as feedstocks.

　　Therefore, in addressing the issue of poor naphtha quality, the procurement process must align market-available naphtha resources with the company’s downstream production requirements and internal procurement control metrics.

　　Secondly, in terms of pricing, China’s naphtha prices are influenced by both the naphtha prices at Shandong’s independent refineries and the spot naphtha prices in Asia. As a domestically tradable supply source, naphtha from Shandong’s independent refineries typically sees its price driven by supply-and-demand dynamics and refinery inventory fluctuations. Under normal circumstances, its price movement is closely tied to inventory levels, making it relatively straightforward to forecast trends. Meanwhile, Asian spot naphtha prices generally follow the volatility of Brent crude oil futures. Downstream customers can leverage these price movements—along with crude oil and Shandong independent-refinery naphtha prices—to adopt flexible trading strategies, thereby mitigating operational risks.

　　In terms of settlement methods, domestically produced naphtha is generally settled in cash.

　　In terms of transportation, naphtha is primarily shipped by road and by vessel. Road transport is relatively flexible but has limited capacity and higher freight rates, whereas maritime transport offers large cargo volumes and lower rates, yet it is characterized by longer transit times, greater risks, and lower operational efficiency. Currently, road transport remains the dominant mode for naphtha shipment.

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