OilChem: China naphtha crackers slash rates on supply fears

Recent escalation in the Middle East conflict has heightened the risk of a Strait of Hormuz blockade, directly threatening Chinese naphtha imports as approximately 40% of the China's naphtha supply originates from the Middle East. This feedstock disruption risk has forced domestic naphtha crackers to cut operating rates and triggered downstream units to follow suit.

China naphtha cracking utilization fell to 82.44% as of the week ending March 13, down 5.75 percentage points week-on-week and 6.19 points since late February. Over 20 mln t/y naphtha cracking capacity have been affected, with units in South China, including Sinochem Quanzhou, CNOOC and Shell, and Sinopec Maoming