Brazil's Braskem has been buying bigger volumes of naphtha from Europe in recent days due to low stocks in Brazil as the petrochemicals producer continues to negotiate with Brazilian state-led oil company Petrobras over the terms of a supply contract, sources said Wednesday.
According to traders, Braskem bought 6-7 spot cargoes in recent days, on top of term supply contract material. The company has term-supply contracts to import naphtha from the Mediterranean.
"I think as they [Braskem] are still negotiating terms with Petrobras it means stocks are low in Brazil, so they are having to buy," said one trader. Late Tuesday, Petrobras said it will continue to supply Braskem with naphtha while the two companies hammer out a long-term supply contract.
Petrobras and Braskem executives met Tuesday but were unable to come to an agreement, an industry source told Platts.
Petrobras said it would not halt naphtha shipments to Braskem while the two sides work on a definitive agreement. A 45-day temporary agreement signed in November expired Tuesday.
"There will be no interruption of supply until a definitive deal has been reached," it said.
However, a number of traders said Braskem had been in the market to source material from Europe.
Braskem's reported buying has provided support to a European market that has been characterized by slim end of year buying from European petrochemical crackers.
