India's Reliance Industries sold an additional 80,000 tonnes of naphtha for October lifting from Sikka, bringing its total volume for the same month to 160,000 tonnes. The company sold the parcel for second-half October lifting to Koch, traders said on Monday.
However, prices given were at a wide range, from flat to around $5.00 a tonne discount to Middle East quotes, on a free-on-board (FOB) basis. "Reliance will never sell their parcel at a discount," said a trader. "The market is weak no doubt, but the lowest Reliance would go is probably flat.
This is because they have the option of channelling the parcel into their refinery to reform it into gasoline if they can't get the price they really want," he added. Koch is likely to ship the parcel to the United States given the grim situation in Asia, where supplies are flooding the market.
Due to persistently weak demand and glut in Asia, traders were eyeing a reversal of the usual West-East arbitrage naphtha trades. Reliance last sold 80,000 tonnes of naphtha to BP for October lifting at $5.00-$7.00 a tonne premium to Middle East quotes, FOB, which traders said would likely end up in the United States as well.
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