Saudi Aramco to hold July-December term negotiations for naphtha with Asian buyers

Asia's top naphtha term supplier Saudi Aramco plans to hold its July-December term negotiations with Asian buyers in London in the second week of May. Its customers include CPC, Daelim Corp, Hanwha Corp, Shell, BP, Chevron and PetroChina. The company is expected to up its premiums since last time, as it has already lost out after conclusion of H1 deals. The previous talks for H1 term negotiations had occurred in December 2008 at a time when the global economy had collapsed and Asia had witnessed it’s worst-ever slump due to poor Chinese demand. At that time, Saudi Aramco had fetched its lowest premiums in years at US$3-5/ton above Middle East quotes on a free-on-board (FOB) basis for supplies lifting in H1-09. Immediately after the company concluded its deals, the market started to recover and stayed strong on recovering demand in China till recently. Low premium margins will not be acceptable to the company as the market trend has been upwards most of this year until recently. The other naphtha suppliers from the Middle East have managed to up revise premiums. Abu Dhabi National Oil Company (Adnoc) raised its April 2009-March 2010 premiums to US$23.50-26/ton FOB, at least five times higher that its January-December 2009 premiums. Kuwait Petroleum Corp (KPC) concluded April 2009-March 2010 contract at US$19/ton premium, FOB, almost ten times higher than its December 2008-November 2009 premiums.
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