India’s March naphtha exports seen at 700,000-750,000t - traders

18 February 2010 04:52  [Source: ICIS news]

SINGAPORE (ICIS news)--India may export 700,000-750,000 tonnes of naphtha in March, up from an earlier estimate of less than 700,000 tonnes as power generators in the country are increasingly converting from naphtha to gas, traders said on Thursday.

Higher-than-expected Indian exports could weigh on Asia’s naphtha crack spread, which had tumbled to three-month lows of $122.60/tonne (€89/tonne) against Brent crude at closing on Wednesday, ICIS pricing data showed.

“The power generators along the trunk lines are using gas,” said a trader.

India was estimated to ship out nearly 800,000 tonnes of naphtha for February, while the January exports of the petrochemical feedstock were assessed at almost 950,000 tonnes.

Domestic Indian power consumption rises during summer which begins around March, increasing the use of naphtha, traders said.

“Power generators which do not have gas connectivity will use naphtha,” said the trader, explaining why the March shipments were lesser in comparison to January and February.

While India's refinery capacity had increased considerably in recent years, there was no concurrent rise in naphtha exports due to the rising demand for the feedstock from the booming petrochemical sector, they added.

“India’s net naphtha length has not increased in spite of an increase in refinery capacity and a fair amount of naphtha has been replaced from power and fertilizer sectors,” said one trader.

($1 = €0.73)

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By: Felicia Loo

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