Naphtha exports to be lower than expected

Singapore/New Delhi : India's naphtha exports for April are expected to be lower at 800,000-850,000 tonnes versus about 900,000 tonnes likely in March, which was the highest this year, traders said on Friday.

But the lower April volumes, due mainly to Indian Oil Corp (IOC) reducing exports, are unlikely to lift the market, which is under pressure by falling petrochemicals margins due to increased supplies, and end-users eyeing to substitute a small portion of their naphtha feedstock with liquefied petroleum gas (LPG).

"What is sustaining the Asian market right now is that there are no Western barrels coming in for May," a Northeast Asian trader said.

The lack of Western barrels have kept Indian premiums for April parcels at an average of $20 (Dh73.4) a tonne, on a free-on-board (FOB) basis.

So far, Indian refiners including Bharat Petroleum Corp Ltd (BPCL), Oil & Natural Gas Corp (ONGC) and Indian Oil Corp (IOC) have already sold a total of more than 250,000 tonnes of naphtha for April lifting.

IOC was expected to halve its April exports to 120,000 tonnes as it will be diverting cargoes to its naphtha cracker in Panipat.