Naphtha flows fixed to the US from the Baltic region for June currently total around 60,000 mt on one vessel, data from S&P Global Platts trade flow software cFlow showed Thursday, remaining low after only 74,000 mt made the journey in May, down from 363,000 mt in April.
The BW Nile loaded in the Russian Baltic port of Ust-Luga around May 22 and is destined for discharge in New York in the first decade of June.
Only two vessels made the journey in May. The Ance loaded in mid to late April in Tallinn, Estonia and arrived in Houston in the first decade of May. The Seychelles Patriot also loaded in the first half of May in Karsto, Norway and arrived in New York Harbor May 26, cFlow shows.
The lower exports from Europe in May and June reflect weaker demand for light virgin naphtha on the trans-Atlantic route due in part to the grade's high-RVP blending properties, which is more expensive to blend down to meet summer-grade gasoline specifications.
While LVN still moves towards New York Harbor when US gasoline demand is strong, that route has also grown increasingly hard to work as US domestic production has surged in recent years.
"The NYH market is not pricing to take any light naphtha from Europe which is another change from recent months," said a source, adding that Europe is likely to receive LVN barrels from the US Gulf Coast in the second half of June.
"From the second half of June onwards we have USGC LVN turning up, which is nice paraffin quality but cannot be used for blending due to its high RVP and low octane content," the source said.
According to sources, inflows of the highly paraffinic grade in Europe will add to an already long market and likely place further pressure on cracking margins for naphtha in the region.
