KPC aims to almost triple premium for April 2007-March 2008 naphtha

07-Feb-07

To capitalise on the current bullish market sentiments, Kuwait Petroleum Corp (KPC, - Asia's second-biggest naphtha supplier) aims to almost triple the premium for April 2007-March 2008 term naphtha supplies this week for Asian buyer. KPC was heard to have opened offers at US$18/ton above Middle East spot quotes, on a free-on-board (FOB) basis, during its first round of talks with Japanese traders on Monday. However, will the Asian importers accept a rise of more than US$10 in the premium level from KPC's last term contract at US$6.75/ton set for December 2006-November 2007 supplies in a tight naphtha market? KPC and its customers had agreed, last November, on a premium for December 2006-November 2007 supplies at US$6.75/ton above Middle East quotes, FOB. This level was much below the US$14.50 premium set for December 2005-November 2006 supplies and a US$17.50-premium for the August 2006-July 2007 contracts. Asian naphtha prices have strengthened sharply in recent weeks, due to supply shortages from Middle East and India, and supported by strong demand from petrochemical makers due to expanded naphtha-consuming units and fewer turnarounds.