India naphtha exports fall on healthy domestic demand

12 January 2009 09:35  [Source: ICIS news]

SINGAPORE (ICIS news)--India’s naphtha exports have fallen drastically and may continue to remain low due to surging demand from domestic buyers, industry sources said on Monday.

A monthly average of about 500,000 tonnes of naphtha was shipped out of India the fourth quarter of 2008, about half of what is used to be in the same period in 2007.

For January and February this year, traders pegged India’s exports of the material to be around 300,000 tonnes a month.

Indian naphtha exports have dwindled as they are diverted to the domestic market, where Indian power stations are using the feedstock as fuel rather than liquefied natural gas (LNG).

LNG prices are at least $120/tonne (€88.8/tonne) higher than naphtha prices.

Last week, LNG was pegged at around $500/tonne CFR (cost-and-freight) while naphtha averaged $380/tonne CFR Japan.

Bharat Petroleum Corp (BCPL) had recently opted to sell its intended exports of  90,000 tonnes of low-aromatics naphtha (LAN) to domestic Indian end-users. The tender had originally offered these supplies for lifting over April-June from Mumbai.

The reduced volume from India had led to a spike in premiums for naphtha supplies in northeast Asia.

($1 = €0.74)

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By: Desmond Chia
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