Despite deal conclusion at premium of US$14/ton with CPC, Kuwait Petroleum Corp (KPC) has brought down premiums on term naphtha to US$13/ton. This is the first time the company has reduced premium to this level, despite being in a position to conclude deals at higher premiums. The latest offer has been accepted by three buyers. Fervent buyers’ resistance from the likes of Hanwha Petrochemicals, YNCC, Mitsui Chemical, Maruzen as well as Haldia Petrochemicals, could have triggered the dip. Recently, Japanese trading houses Marubeni and Petro-Diamond’s contracts for December-November were terminated by KPC during the course of negotiations. Despite the latest acceptance, it is speculated that more contracts could have been terminated after the revision. Off late, it has been noted that KPC has been selling more spot cargoes lately and at slight premiums.
This unparalleled move could affect rival Abu Dhabi National Oil Co's (ADNOC) ongoing term talks, as it usually takes its cue from KPC. Despite a firmness in naphtha sentiments vs last month, buyers are on guard, as they will be bound into a 12 month deal at a time of uncertain demand and supply dynamics.
09-Nov-09 
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