Kuwait Petroleum Corp (KPC) has sealed a term deal for full-range naphtha lifting April 2013 to March 2014 with at least one buyer at a record premium of $35 a ton to Middle East quotes on a free-on-board (FOB) basis, traders said on Friday.
KPC is in its fifth day of term discussions in Singapore with Asian customers, mainly from Japanese and South Korean firms.
KPC, which started talks on Feb. 4, quoted its first offer at a premium of $41 a tons to Middle East quotes on a free-on-board (FOB) basis but progressively cut it to $39, then to $38, and now to $35.
“Bids have also moved up from about $30 to $34 a ton now,” said a Singapore-based trader. “The deal is close to being done.”
The current offer of a $35 a ton premium is 33 percent higher than its last contract deal for naphtha lifting December 2012 to November 2013 at a record high premium of $27 a ton.
Low naphtha exports from the Middle East and India coupled with the upcoming refinery maintenance season in South Korea and exceptionally strong demand have squeezed supplies in Asia.