Singapore: India’s public-sector oil company Bharat Petroleum Corp. Ltd (BPCL) has issued a term tender to export a total of 285,000 tonnes of low-aromatic naphtha, a trading source said on 27 March.
The tender will close on 3 April, with the validity remaining until 5 April, the source said.
An increasing number of Indian refiners have been offering naphtha via term tenders to lock in their exports’ high prices when the regional petrochemical feedstock market has rallied on supply shortages sparked by lower Indian spot naphtha exports.
BPCL last week sold a high-aromatic naphtha cargo at a high premium of more than $30 (Rs1,320) a tonne to West Asia spot quotes to South Korea’s top oil refiner SK Corp. for March loading from Mumbai, on a free-on-board (FOB) basis, helped by tight supplies in the region, traders said.
FOB means that the seller pays for transportation of the goods to the port of shipment, plus loading costs. The buyer, on the other hand, pays freight, insurance, unloading costs and transportation from the port of destination to the factory.
The refiner also sold term high-aromatic naphtha cargoes at a premium of $28.88 a tonne to West Asia spot quotes to European trader Trafigura for second-half 2006 loading, FOB.
The ICE Brent/naphtha crack, which shows the naphtha market strength, hit a record-high of $210 a tonne earlier this month, sparked by supply shortages amid bullish demand for petrochemical production. But it has eased to below $175 as some 500,000 tonnes of arbitrage cargo supplies from Europe are set to arrive in Asia in late April-early May.
Light naphtha is the feedstock used to produce ethylene and propylene, the basic building blocks for the chemical sector. A feedstock is a substance used as a raw material in an industrial process.
Aromatic or heavy naphtha is used for gasoline, benzene, toluene and xylene (BTX) production.