Trafigura buys more naphtha; snaps up Reliance cargo
SINGAPORE (Reuters) -- European trader Trafigura has bought 55,000 t of naphtha from India's Reliance Industries for end-May loading from Sikka, adding to its unusually high purchases of the fuel from the Singapore cash market, traders said on Wednesday.
Trafigura paid a slightly above $16 a ton premium to Middle East quotes on a free-on-board (FOB) basis for the cargo, making this one of the highest premiums for Reliance Industries since the sales of its March cargoes.
From April 7–26, Trafigura has bought more than 970,000 t of naphtha for June to July delivery, making up more than 80% of all volumes transacted this month.
Japan's Itochu, which this week paid high premiums for India's Bharat Petroleum Corp cargoes, has sold more than 450,000 t to Trafigura while oil major BP sold around 300,000 t to the European trader.
The reasons behind the strong buying were unclear and Trafigura declined to comment in the previous session about the unusual purchases when contacted.
Traders not related to the company said Trafigura may be short of supplies due to heavy demand from Latin America although this could not be independently confirmed.
They added that Trafigura has a naphtha term contract with Russia's Rosneft to lift 2 MMt to 3 MMt of the light fuel from Tuapse this year.
"Trafigura is bullish. Their Tuapse cargoes, which could be initially meant for Asia, may be going to Latin America," said one of the sources.
Traders said overall fundamentals could work in Trafigura's favor as three key Middle Eastern suppliers have either shut or planning to idle their condensate splitters.
Reporting by Seng Li Peng, editing by David Evans
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