IOC resumes spot naphtha export after 2 mths

SINGAPORE (Reuters) - Indian Oil Corp (IOC) is resuming offers of spot naphtha for export next month after a two-month hiatus, adding to the glut in the regional market, traders said on Thursday.

The offer bucked expectations that it would cease spot exports up to October lifting because of maintenance at its Panipat and Koyali refineries.

However IOC, which usually exports a total 180,000 tonnes of spot and term naphtha a month from Dahej and Kandla, has postponed the shutdown of a 120,000 barrels per day (bpd) crude unit at its Panipat refinery by three weeks to Oct. 10, from Sept. 18, its plant executive, R.K. Ghosh said last Friday.

The delay is aimed at continuing production to meet rising domestic demand during a string of religious festivals.

The company is now offering at least 91,000 tonnes of naphtha for October loading: a 30,000-tonne parcel for Oct. 12-15 lifting from Kandla, and two 30,500-31,500-tonne cargoes for Oct. 11-13 and Oct. 25-27 lifting from Dahej, respectively, a tender document showed on Thursday.

The tender closes on Sept. 25, and will stay valid until Sept. 26.

But the exports came at a time when the Asian market is plagued with high suppies.

"Demand for naphtha is so sluggish now. Whether or not sentiment will improve depends on the supply, of which we have plenty now," said a Singapore-based trader.

"There are no arbitrage coming into Asia at the moment, so Indian supplies will be a critical factor. But as I see it, there will be no strong recovery in the market until the end of the year," he added.