By Alexander Miller, consultant in energy markets. Eurasia Business News, August 4, 2025. Article n°1681

China’s naphtha demand in Q2 2025 helped cushion the decline in overall oil demand. Key points include:

China nearly doubled its naphtha import quotas for 2025 compared to 2024, allowing around 24 million tons of imports. This increase responds to rising demand from new petrochemical plants and supply disruptions of alternatives like U.S. propane and ethane due to trade tensions.

Naphtha imports in the first five months of 2025 rose 22.8% year-on-year to nearly 6 million tons, the highest level since 2015. Major suppliers included Russia, UAE, and South Korea.

The International Energy Agency forecasts China’s naphtha demand to grow about 6% in 2025 and 8.6% in 2026, outpacing growth for propane and ethane combined, driven by new cracker plants starting operations.

Naphtha prices in China averaged around $1,055 per metric ton in June 2025, supported by strong petrochemical demand despite some global price pressures.

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While China’s total oil demand fell by 450,000 barrels per day in Q2 due to seasonal refinery maintenance and weaker transport fuel demand, robust naphtha consumption limited the overall impact on petrochemical feedstocks and refinery margins.

Strong naphtha demand, supported by expanded import quotas and new petrochemical capacity, helped offset China’s Q2 2025 oil demand decline by supporting refinery feedstock needs and margins despite broader demand challenges.

Naphtha is a volatile, flammable liquid hydrocarbon mixture derived from the distillation of crude oil or natural gas. It is an intermediate petroleum product with a boiling range typically between about 35°C and 210°C (95°F to 410°F), falling between lighter gases like propane and heavier liquids like kerosene.

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© Copyright 2025 – Eurasia Business News. Article no. 1681