HPCL cancels 3rd export tender

Singapore, Aug 31: Hindustan Petroleum Corp. Ltd. (HPCL) has cancelled its third successive fuel oil export tender in less than a month as the depressed Singapore market continues to yield poor price bids, traders said on Thursday.

HPCL had cancelled two other tenders earlier this month to sell high-density, high viscosity cargoes, as Singapore stocks stayed at near-capacity levels of about 14 million barrels for a fourth-straight week.

Two other Indian refiners, Kochi Refineries and Indian Oil Corp.

(IOC) had also cancelled earlier tenders for similar high-density cargoes after receiving similarly low bids.

In the latest tender, the refiner had offered three September-loading 380-centistoke (cst) parcels, totalling 65,000 tonnes, of 4.5 percent sulphur content and 0.998 kg per cubic metre density.

The first parcel, a 20,000-25,000-tonne lot for Sept. 7-10 loading from Mumbai, has been offered to the market three times, traders said.

The other two, which had not been previously offered, were a 20,000-tonne and a 40,000-tonne parcel, both for Sept. 20-28 loading from the same port.

''They had offered the first parcel into the market three times, shifting the loading dates from late August to early September but there were no takers and HPCL was not willing to let it go at dirt-cheap levels,'' a Singapore-based Asian trader said.

Traders said bids for the cargo were at a massive discount of around a tonne to Singapore spot 380-cst quotes, on a free-on-board (FOB) basis, well below previously done levels at discounts of around - a tonne for a package of three July-September loading HPCL parcels done in June.

The Singapore market has been beset by heavy supplies totalling over 10 million tonnes of Western cargoes from June-August, plunging the product's differential to its steepest-ever discount of a tonne earlier this month.

Indian refiners have also added to the glut, selling well above average volumes since April. September volumes totalled 315,000 tonnes, a fourfold increase year-on-year.

In total, Indian refiners have sold 2.25 million tonnes so far this year, above 2005's overall total of 1.83 million tonnes, even before the peak end-of-year export season.

Reuters