LPG: Oct 4-8: November CP forecast revised up on rises in crude
CFR Far East
In the CFR Far East market last week, propane prices strengthened on the back of a rise in crude prices and firm buying interest. On the other hand, butane prices softened since butane prices were below propane prices in the expected November CP along with anticipation that supply for butane cargoes of US origin might increase going forward. Rim Asia Index for propane was at $861.00 per metric ton (/mt) as of Oct 7, up $16.75/mt from Sep 30. Rim Asia Index for butane was at $841.00/mt, down $8.25/mt. For November delivery, spot demand from traders was seen. Due to soaring LNG market, Korean importers were reported to be moving on buying spot cargoes to supply city gas companies. Further, Japanese importers were also expected to have room to procure cargoes. Nevertheless, these buyers did not rush into discussions as supply was seen to be ample. With the spread between the CFR Far East market and US Mont Belvieu quotations widening, some sources pointed out that supply from the US to the Far East might increase going forward.
FOB Middle East
The expected November CP was revised up to around $850/mt for propane and around $830/mt for butane. Regarding November loading, sellers and buyers for even-split cargoes emerged. Bids and offers were heard at a discount of $2/mt to a premium of $5/mt to the November CP. On the other hand, available cargoes for prompt delivery were observed. Saudi Aramco seemed to have a total of three cargoes for October loading and one Middle East trader was reportedly offering a 44,000mt propane cargo for Oct 13-14 loading at a premium level to the November CP. Meanwhile, buyers that had interest in purchasing these cargoes were not observed.
Asia Pressurized Market
As for the FOB South China market, some importers seemed to offer cargoes for second-half October loading at a premium in the high $30's/mt to the October CP while offers for first-half November loading were heard at a premium in the high $30's/mt to the November CP. In Vietnam, Nghi Son refinery apparently carried out a sell tender for two cargoes of 1,500-1,700mt each for October loading and seemed to have sold one of them in the domestic market.