Adnoc is seeking to reduce its term naphtha delivery period to three from 12 months starting October, but buyers are resisting the move due to ample spot supply in the market, traders said on Tuesday.
"Adnoc is looking to sell around one million tonnes of naphtha for October 2010 to September 2011 delivery, but they are facing high supplies because several of the buyers had either previously cut their term volumes or dropped their contracts for other delivery period," said a trader.
"With all these high supplies in the market, it really does not make sense for them to insist on high premiums," he added.
Adnoc has pegged its splitter naphtha at $11.50 a tonne to its own formula on a free-on-board (FOB) basis, and paraffinic grade at $12.50 a tonne premium FOB for the new October term supplies.
The move comes even as most North Asian buyers have dropped or lower the volumes in their term contracts with Middle Eastern producers such as Saudi Aramco, Kuwait Petroleum Corp, Qatar's Tasweeq and also Adnoc.
Follow Emirates 24|7 on Google News.
