LPG: Sep 7-11: Market weak due to drop in crude prices
CFR Far East
The CFR Far East market plunged last week due to slack supply/demand for propane and falling crude prices. Rim Asia Index for propane and butane as of Sep 10 was at $338.75 per metric tons (/mt) and $386/mt, down $29.75/mt and $24.75/mt respectively from Sep 4. Supply/demand for pure propane cargoes was still slack. For delivery to Korea, two 23,000mt propane cargoes seemed to be traded at a discount in the $30's/mt to October CFR Far East quotations. Regarding cargoes containing butane, several buyers such as two Japanese importers were apparently interested in buying even-split cargoes for October delivery. For delivery to Indonesia, two European traders bought two 44,000mt 50:50 cargo for second-half October delivery at a premium in the $10's/mt to the October CP, according to sources.
FOB Middle East
The expected October CP was revised down to about $350/mt for propane and around $355/mt for butane due to a dive in crude prices. One North Sea producer and one Japanese trader were apparently interested in procuring 44,000mt 50:50 cargoes for October loading. One Middle East trader apparently won a sell tender issued by Kuwait Petroleum Corp (KPC)that had closed at 10:00 local time on Thursday with bids valid 17:00 until the same day. Sources reckoned that the awarded price were at a level equivalent to a discount of about $20/mt to the October CP. The Middle East trader seemed to deliver the cargo to India. Offered in the tender was a 44,000mt 25:75 cargo to be loaded from Mina Al Ahmadi on Oct 2-3. KPC requested bids based on the November CP.
Asia Pressurized Market
On FOB South China, one importer from South China was interested in selling cargoes for second-half September loading at a premium in the mid $30's/mt or above to the September CP. For October loading, importers held high inventories and could sell cargoes at a premium of $40/mt to the October CP or above. Nevertheless, buying interest was dull. Regarding CFR Vietnam, since the COVID-19 outbreak was fading in Vietnam, domestic demand was clearly recovering. Under such circumstances, several Vietnamese importers exercised plus tolerance on term cargoes for second-half September delivery according to sources.