Owing to the glut of naphtha in the Asian region, India's state-owned Indian Oil Corp (IOC) has sold three cargoes of 30,000 tons each to Itochu for a heavy discount for November loading. IOC sold one 30,000 ton cargo for Nov. 12-15 loading from Kandla at a discount of US$40, while the other two cargoes for loading from Dahej were sold at markdowns of US$36/ton and US$30/ton. Earlier, the company sold 30,000 tons of naptha for Kandla lifting to PetroChina at a discount of US$21/ton.
The major reason for this reduction is oversupply caused by cutbacks in cracker run rates. Key processors in Asia, particularly China, rely very heavily on demand from the markets of the West. With deteriorating export demand as well as bearish domestic market sentiments, petrochem majors are saddled with high inventory levels. This has left them mulling options of reduced run rates and even plant shutdowns. It is perceived that the yet full capacity operational crackers at are a result of anguish by the majors to consume naphtha inventories and because they have any profit realisation.
27-Oct-08 
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