Kuwait Petroleum Corp (KPC) is set to start negotiations to renew December 2009-November 2010 naphtha deals with Asian buyers amid weak market. Sentiments have deteriorated as the petrochemical outlook worsened as demand from China is waning amid fresh supplies are set to flow in from Qatar, coupled with reduced run rates at crackers in Asia.
KPC holds three term talks every year. Its August 2009-July 2010 contracts fetched US$12/ton premium to Middle East quotes, on a free-on-board (FOB) basis. This is likely to drop to single digits as per market players. But KPC is unlikely to relent to buyers' pressure as its yearly term exports are expected to drop over time. But its supplies of spot naphtha have been rising due to delays in the start-up of an aromatics plant that had been slated to absorb the cargoes.
It’s current buyers include Japan's Marubeni, Mitsubishi Chemicals, South Korea's Hanwha and YNCC, Taiwan's Formosa and CPC Corp and India's Haldia Petrochemicals.