Samsung Total Petrochemicals is seeking naphtha for August 2011 to June 2012 delivery as its current term contract is about to end, as per Reuters. The grade sought is open-spec naphtha with a maximum mercury content of 10 parts per million (ppm) in a tender which closes on June 10.
In its current contract from September 2010 to August 2011, Samsung Total has about 600,000 tons of naphtha at US$4/ton discount to Japan spot quotes on a cost-and-freight (C&F) basis. The South Korean petrochemical maker could expect to buy at discounts for the new contract in a weak Asian market. Naphtha sentiment has slumped since May 12 after Asia's top naphtha buyer Formosa shut a cracker following a fire at its pipeline. The weak market will be favourable to buyers, as inter-month spreads (indication of how much buyers will pay for spot cargoes) flipped into a discount for the first time in 7-1/2 months on May 31.