BPCL cancels tender on low bids

Singapore, May 16: Bharat Petroleum Corp. Ltd. (BPCL) has cancelled a tender offering three June-August fuel oil cargoes totalling 75,000 tonnes due to low bids, industry sources said on Wednesday.

The three 380-centistoke (cst) cargoes of 25,000 tonnes each, of maximum 4 percent sulphur and 0.99 density, had been for loading from the refiner's Kochi terminal from June to August.

''Despite the tight market, the bids that went in were below BPCL's expectations. That's mainly because it's expensive to get a medium-ranged tanker to pick up the cargoes at Kochi due to the severe draft restrictions there,'' a Mumbai-based trader said.

Traders said BPCL, which makes monthly fuel oil shipments of around 80,000 tonnes into Singapore as part of an exchange deal, could re-offer the cargoes on a cost-and-freight (C&F) basis or sell them into the domestic market.

Indian refiners have sold or offered year-high volumes of 285,000 tonnes of June-loading parcels, up from last year's monthly average of 265,500 tonnes, in line with the country's peak export season.

The rising exports will help ease a market that has been squeezed since second-half February due to lower inflows from the West and the Middle East amid firmer demand from China and the marine fuels market.

Western inflows are expected to be at 2.1-2.2 million tonnes for June, below the monthly average volume of 2.7-2.8 million tonnes.

Middle East supplies are also limited by a month-long turnaround at Saudi Aramco's Ras Tanura refinery and by peak domestic summer demand.

BPCL last sold a similar April-loading parcel at a premium of a tonne to Singapore spot 380-cst quotes on a cost-and-freight (C&F) Singapore basis, equivalent to current market levels at discounts of - a tonne, FOB.

Reuters >