Naphtha Exports From India Expected To Fall In 2017

Naphtha exports from India expected to fall in 2017

20-Feb-17

India's 2017 naphtha exports are expected to fall, after the volumes rose for the first time in five years in 2016, as per Reuters. India's 2016 average monthly gross exports stood at 700,000 tons, official data showed, their highest since 2012. Their net exports (the difference between total exports and imports) were 460,000 tons. "These are expected to fall to 370,000-380,000 tons a month this year," said Premasish Das, Director for Asia and Middle East downstream oil markets at consulting firm IHS. Naphtha is required for India's growing petrochemicals and gasoline capacities.

Fewer European naphtha in Asia and a lack of alternative liquefied petroleum gas (LPG) feedstock were reasons that turned the weak naphtha around earlier this year. The supply weakness has got compounded after a fire mishap at Abu Dhabi's Ruwais refinery, and now India's supply reduction, sending Asia's naphtha margins (price difference between naphtha and Brent crude) to a 13-month high of US$115.18/ton on Feb. 14.

In January, Oil and Natural Gas Corp (ONGC) stopped exporting naphtha from Hazira after diverting the fuel to a cracker operated by ONGC Petro additions Ltd (OPaL). Indian Oil Corp (IOC), which sold at least 460,000 tons of gasoline-grade naphtha in 2016, only makes sporadic offers from Paradip after a gasoline-making unit started up. Reliance Industries would also be importing heavy naphtha once its new paraxylene plant is fully commissioned, Asia's 2017 monthly net supply deficit is expected to rise to 4.2 mln tons vs 4 mln tons last year, said Das.
The Middle East and Europe Mediterranean will fill the gaps but the tightness could persist for the next three months due to refinery maintenance and low-arrival levels of Western cargoes. "The current tightness has more to do with unplanned outages and winter," said Das.