SINGAPORE: India's Oil and Natural Gas Corp (ONGC) has sold a February naphtha cargo at about $10 a tonne above Middle East quotes on a free-on-board (FOB) basis, traders said on Friday, making this the lowest premium the seller has fetched in over two months.
ONGC sold the 34,500-tonne cargo for Feb. 10-11 loading from Hazira late on Thursday to Japan's Petro-Diamond, the traders said.
The fresh premium fetched was 33.33 percent or $5 lower than a previous cargo sold out of the same port, also to Petro-Diamond but for Jan. 24-25 loading.
The last time ONGC had fetched $10 a tonne premium was for two November cargoes.
Separately, ONGC has also sold an 8,300-tonne naphtha cargo out of the Kakinada sea port for Feb. 2-5 loading to Oman Trading at a discount of about $30 a tonne to Middle East quotes on a FOB basis.
The smaller the cargo, the lower the price as buyers are unable to maximize on freight rates.
ONGC regularly exports naphtha from Hazira and Mumbai but not Kakinada sea port.
Naphtha sentiment has been mostly weak since the start of the year following record high levels of 2.2 million tonnes of naphtha for January arrival in Asia from the West including Europe and the United States.
At least close to 1.7 million tonnes of western naphtha are scheduled for Asia arrival, creating a lopsided market of heavy supplies at the prompt month, traders said.
But as naphtha prices fall, some of the Asian buyers' plans of using a portion of alternative liquefied petroleum gas (LPG) to replace the former no longer look attractive.
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