Indian refiner Bharat Petroleum Corp Ltd (BPCL) has cancelled a term tender to export 180,000 tonnes of low aromatic naphtha in 2008 due to strong domestic demand, a company source said.

“We’re seeing good domestic demand now and prefer to sell the product at a good price in India,” said the source.
The tender had offered six 30,000-tonne cargoes over a period of 11 months.
“The bids received were not very good, plus Reliance are keen to buy 90,000 tonnes of naphtha over a three-month period,” said a source close to the negotiations.
Domestic private refiner Reliance Industries will use the naphtha as feedstock for its petrochemical plants.
BPCL will not re-issue the tender as domestic prices remain competitive and it could utilise the naphtha as feedstock for its recently refurbished hydrocracker in Mumbai for the production of diesel, the company source said.
Despite Asian naphtha prices easing this month, the premium against Brent improved slightly, as BPCL’s decision to cancel the tender raised market concerns over January supply flows.
The ICE Brent naphtha crack for the first-half February edged up to $184.00, after narrowing more than $14.00 in the previous settlement.
“Today the market is reacting to concerns over what exactly is India going to do with regards to exports in January, the cancellation of the tender has spooked the market some,” a trader said.
Before this, the Asian market had seemed relaxed about the lower Indian supplies, reflected by the lower premiums offered into the BPCL tender, one trader said.