The Egyptian General Petroleum Corporation (EGPC) has reissued a tender to sell up to 50% of the naphtha cargoes left over from its H2 2010 term cycle, according to trade sources.
Sources said EGPC issued the tender to sell up to seven heavy full-range naphtha parcels over August-September. Each parcel is 35,000 mt and three cargoes have been allotted for August and September each with an optional cargo for the second month.
The tender closes July 8 with validity till July 16.
EGPC had managed to sell only 11 out of the 25 naphtha cargoes it had initially offered loading ex-Suez in its term July-December 2010 contract.
Sources said that the remaining cargoes went unawarded as the exporter considered the bids to be too low. Traders said that initial bids submitted for the August-December liftings were in the negative terrain due to the weak demand outlook for naphtha in the second half of the year.
Of the 11 cargoes awarded in the first round, five were for July lifting, two for December, and a cargo each from August to November. The buyers included RBS Sempra, Vitol, Total, Gunvor and Petronas, among others.
Vitol is said to be lifting one cargo per month over July-December at a premium of $8.50/mt to the Mean of Platts Arab Gulf naphtha assessments, while four other buyers nabbed a parcel each for July at premiums ranging from $2.50/mt to $3.50/mt to MOPAG. Malaysia’s Petronas will lift a December cargo, which it bought at MOPAG plus $12/mt. All parcels were sold on an FOB Suez basis.
It is not clear if EGPC will be issuing another tender to sell the remaining parcels, which should be spread over the October-December period, sources said.
"With the weakness in the market currently, [it is] not wise to sell unless they really need to," a trader with a Japanese trading company said Tuesday.
The benchmark CFR Japan naphtha price dipped to a near nine-month low of $620/mt at Asian close Monday, on plentiful spot supply from India and the Middle East, limp demand from Asia, feeble petrochemical margins and softer crude prices.