SINGAPORE, Aug 13 (Reuters) - South Korean buyer YNCC and sellers have reached deadlock in their naphtha term talks as all parties were entrenched in their ideas, traders said on Monday.
They added that this could lead to cancellation of the tender for naphtha cargoes originally meant for September 2012 to August 2013 delivery.
“Given that there are no conclusions to YNCC’s latest term tender, the tender may be cancelled,” said a trader.
YNCC had placed bids at $1.50 a tonne premium to Japan quotes on a cost-and-freight (C&F) basis but these failed to interest suppliers, who quoted offers from $5.00 a tonne premium.
“YNCC came out at the wrong time as the high naphtha prices in Europe, supported by gasoline, are influencing prices in Asia,” a Singapore-based trader said.
Rival company Honam Petrochemical was out in late June and secured term parcels at prices ranging from a discount of 50 cents to a premium of 50 cents.
“Prices are now in premium compared to when they were at a discount, when Honam Petrochemical was out in the market for term cargoes,” the trader added.
YNCC has an existing contract which expires in December. The deal was for around 800,000 tonnes of naphtha for 2012 delivery at a discount of 50 cents a tonne to Japan quotes on a cost-and-freight (C&F) basis with about seven sellers.
Naphtha is a feedstock for petrochemical products including plastics. (Reporting by Seng Li Peng; Editing by Anthony Barker)