SINGAPORE: Japan's Idemitsu Kosan has bought a total of 70,000 tonnes of naphtha from Mangalore Refinery Petrochemicals Ltd (MRPL) and Oil & Natural Gas Corp (ONGC) at steep premiums on persisting strong Asian demand, traders said on Tuesday.

The Japanese refiner and petrochemical maker bought a 35,000-tonne cargo from ONGC for January 24-25 loading from Hazira at levels in the low $40s a tonne to Middle East quotes on a free-on-board (FOB) basis, marking the highest premium ONGC has fetched a naphtha cargo sold out of Hazira in about nine months. ONGC also exports naphtha from Mumbai.

Idemitsu also locked in 35,000 tonnes from MRPL, a subsidiary of ONGC, for January 26-28 loading from New Mangalore at premiums around the low $40s a tonne level, a new eight-month high premium for MRPL.

Despite a record high volume of about 1.7 million tonnes of western exports expected to arrive in Asia in January, the east is still seen grappling with supplies.

A string of recent and ongoing refinery maintenance in India and previous refinery run cuts in Asia due to poor refining margins have dented Asian supplies. Lack of alternative liquefied petroleum gas feedstock has added to the competition for naphtha.

The last time when naphtha premiums were persistently scaling upwards was in the first quarter of 2013, with some Indian refiners eventually fetching record deal done premiums at above $60 a tonne for cargoes lifting in March and Apri

Source : economictimes.indiatimes.com