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[SINGAPORE] Commodity trader Swiss Singapore Overseas Enterprises is expanding its trading operations in Singapore and may start an office in the United States by the end of the year, said three industry sources on Tuesday.
The company, which is part of the Indian multinational conglomerate Aditya Birla Group, is starting a naphtha trading desk at its Singapore office, one of the sources familiar with the matter said.
Swiss Singapore has hired a trader from South Korea, previously employed by South Korean petrochemical firm Daelim Corp, as its first dedicated naphtha trader but the trader has not started work yet, the source added, declining to be named as he was not authorised to speak with the media.
Aditya Birla did not immediately respond to Reuters' request for comment.
"Petrochemical demand is strong, so (the company) is hoping to capture that," the source said.
He also anticipates increased demand from Saudi Arabia once new petrochemical projects come onstream which could prompt imports into the country.
Consulting firm FGE said that Saudi Arabia's naphtha demand will likely rise by about 65,000 barrels per day year-on-year once Sadara Chemical's 1.5 million tonnes-per-year cracker ramps up production and PetroRabigh-2 starts operations later this year.
Still, declining naphtha margins are making it difficult for companies to be profitable, limiting expansion in the sector to just a few companies, a South Korean naphtha trader said.
The naphtha margin for refineries in Singapore rose in February to a more than one-year high of US$115.18 a tonne but has since dropped to US$55.08.
Swiss Singapore is also planning to hire one derivatives trader to add to its over 70 trading and operations staff in its Dubai office and could start a new office in the United States by end of the year, the first source said.
Swiss Singapore was incorporated in Singapore in 1978 but is headquartered in Dubai. It has a turnover of US$4 billion and trading volumes of over 15 million tonnes per year, according to the company website.
It trades in coal and oil products such as gasoil and jet fuel.
The company has been expanding its trading presence in Asia in recent years, winning contracts to supply oil products into Sri Lanka and Pakistan and purchasing term barrels from Middle East refiners.