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Updated: Wednesday, February 8, 2012 News Source: Alrroya
Kuwait - Kuwait Petroleum Corp (KPC) has set offers for April 2012 to March 2013 naphtha at $26 a tonne premiums to Middle East quotes on a free-on-board (FOB) basis, about 40 per cent higher versus its December 2011 to November 2012 term, traders said on Wednesday.
So far, no buyers have accepted the full-range naphtha offers.
"Buyers were expecting KPC to keep the premiums at $18.50 a tonne, similar to last year. So the offer was way above expectations," said a trader.
Traders said although spot premiums of Indian naphtha hit an 8-month high recently with prices hitting more than $30.00 a tonne on an FOB basis, buyers usually pay lower freight rates compared to chartering ships from Kuwait to Japan or South Korea.
But overall naphtha supplies have been tight due to the closure of refineries in Europe and the United States which would prevent Asia from getting barrels from the West.
Asia will now have to rely even more on Gulf and Indian suppliers for cargoes to plug the loss of production from the refineries closure.
These factors will favour KPC in its negotiations in Singapore this week.
KPC usually holds three term discussions in a year for three different 12-month contracts.