HPCL offers 20,000 tons of naphtha for February amid 3 week low cracks

28-Jan-10

India's Hindustan Petroleum Corp Ltd (HPCL) has offered 20,000 tons of naphtha for February lifting, amid three weak low naphtha crack levels on weakening market outlook of softer demand. Sellers are prepared for the low premiums as demand has started to wane ahead of multiple cracker maintenance shutdowns in the region. Indian Oil Corp and Oil & Natural Gas Corp (ONGC) will also be awarding their tenders late week. News of Formosa delaying the arrival of 50,000 tons of naphtha at Mailiao to H1-March from H2-February has also shaken market's confidence, as it considers delay of more cargoes. Naphtha prices in Asia have plunged to 6 week lows, while cracks hit a 3 week low on rising inventory levels ahead of a heavy naphtha cracker maintenance shutdown over the next few months that will take off 600,000 tons of demand from Asian markets. Europe will need to find a sales outlet for 200,000-300,000 tons of naphtha a month from February.