As a delayed monsoon limps to normalcy, naphtha export from India for the month of October is at par with September volumes of 850,000 tons. Reliance’s spot exports for these two months have been 300,000 tons each. BPCL is also resuming exports from its Kochi refinery for the first time this year, as it has completed expansion at a crude distillation unit (CDU) to 100,000 bpd.
Kuwait Petroleum Corp (KPC) is considering selling an extra 50,000 tons of naphtha as spot cargo this month, taking September spot exports to at least 200,000 tons. Additionally, Qatar is set to pump some 200,000 tons of naphtha every month into Asia starting next month as it commissions a new condensate splitter. This has dampened market sentiments in Asia, but crack spreads continue above US$100/ton due to absence of European exports to Asia. The reduced exports from Europe led to stockpiling by several buyers in anticipation of reduced supply, leading to an additional dip in current demand.
A dampening of market outlook is apparent in a recent spot deal concluded by ethylene maker YNCC for 25,000 tons H2 October arrival at parity to Japan spot quotes on a cost-and-freight (C&F) basis. This is lesser than the US$4 premium fetched in a deal concluded by South Korea’s Honam Petrochem of 50,000 tons for H2 October arrival, C&F. ONGC sold a 35,000 ton cargo for Oct. 7-8 lifting from Hazira at a premium of US$18/ton FOB, a 28% dip in premiums from last months levels.