Low price bids compels Reliance to cancel sale tender of 960,000 tons of naphtha for April 2009-March 2010

Premiums for Asian naphtha have dropped over the fortnight as robust Chinese demand started to wane. Inability to meet its price expectations has compelled Reliance Industries to cancel a tender offering up to 960,000 tons of naphtha for April 2009-March 2010. The Indian petrochem major was counting on selling upto 80,000 tons per month for the 12-month period for liftings from Sikka, which could include supplies from its new refinery at Jamnagar. The tender closed on Feb. 27 and bids remained valid until March 5. Though premiums are marginally higher, the volatility in premiums makes the expected steady supply from Reliance unattractive. Very few buyers are willing to lock in long-term purchases at this stage. Exports of the company are expected to rise as exports increase from Reliance’s recently commissioned 580,000 bpd refinery in Jamnagar, rising naphtha supplies from Reliance's east coast gas field, and a switch to gas by Indian naphtha users.
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