24 May 2007 05:08 [Source: ICIS news]
By Nurul Darni
SINGAPORE (ICIS news)--Saudi Arabian Oil Co (Aramco) is set to secure higher naphtha premiums for July to December 2007 contracts, citing bullish market trend and reduced supplies in the second half of the year, traders said on Thursday.
“Current market fundamentals are advantageous to the supplier. It doesn’t give existing contract buyers much room to negotiate for lower premiums,” one contract buyer with a Japanese trading company said.
Aramco, the biggest Mideast naphtha supplier to ?xml:namespace>
It raised offers of A180 naphtha at a $25/tonne premium to Aramco pricing formula, Rabigh naphtha at $23/tonne premium, Jubail naphtha at $21/tonne premium and A310 naphtha at $20/tonne premium.
Buyers have balked at such lofty contract prices and most are still in talks with Aramco officials, where face-to-face negotiations are taking place in
But the final contract prices could be achieved early next week, when all the buyers have reached an agreement, they added.
“I would not be too surprised if one buyer agrees on the prices and others would have to follow suit. Aramco would just say take it or leave it,” a second buyer with a Japanese end user said.
Aramco had informed its existing contract customers earlier that it would trim its naphtha supplies slightly to
Aramco is establishing a $9.8bn refinery/petrochemicals complex at Rabigh via a joint venture with Sumitomo Chemical. Capacity from late 2008 will include 1.3m tonnes/year of ethylene and 900,000 tonnes/year of propylene.
Its targeted high premiums came on the heels of recently concluded high prices by Abu Dhabi National Oil Co (Adnoc) with South Korean buyers earlier this month.
Adnoc successfully raised its recently negotiated July 2007-June 2008 premiums, over its April 2007-March 2008 prices with no discounts given to any of its customers, buyers have said.
Apart from Aramco, other key suppliers of naphtha from the Middle East to
($1 = €0.74)
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