06 June 2008 08:37 [Source: ICIS news]
SINGAPORE (ICIS news)--State-run Kuwait Petroleum Corp (KPC) has lowered the offer for its August 2008-July 2009 term naphtha from a premium of $18.50/tonne to $17.50/tonne, due to resistance from buyers, industry sources said on Friday.
KPC had hoped to clinch higher premiums for its full-range term naphtha due to the current tight situation in Asia caused by lesser supplies from Europe and India.
The latest bids were heard at $16.50/tonne to Middle East quotes FOB (free on board), up $2.50/tonne from $14/tonne as buyers were hesitant to pay such high premiums.
"We will most likely see the settled price at $17/tonne to Middle east quotes FOB," a buyer said.
KPC’s most recent April 2008-March 2009 term naphtha contract was settled at a premium of $19.75/tonne while the price for its August 2007 to July 2008 contract was settled at a premium of $21/tonne.
KPC began negotiations with its Asian customers on Monday for its August 2008-July 2009 term naphtha in London. Talks are normally held for one week.
KPC is Asia's second-largest supplier of naphtha after Saudi Arabia. KPC supplies term naphtha in three 12-month cycles, with one starting in April. The other two start in August and in December.
Customers involved in current talks include Royal Dutch Shell, BP, Japanese trading house Marubeni Corp, South Korean petrochemical companies Samsung Total Petrochemicals and Honam Petrochemical Corp, Asia's top ethylene maker Taiwanese Formosa Petrochemical Corp and refiner CPC Corp.
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