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Weekly SummaryInternational/Markets

LPG: Jan 6-10: Prices recede sharply late last week

CFR Far East

The CFR Far East market gained early last week, pulled by strong crude prices. The market, however, retreated on the back of an increase in spot supply for pure propane cargoes of US origin. According to sources, foggy weather did not occur for a week in the USGC and market players had forecast in advance that the Panama Canal would be congested. Thus, in February, cargoes would smoothly flow into the Far East from the US. The Rim Asia Index fell to $564.50/mt for propane and $599.00/mt for butane as of Jan 9, down $50.00/mt and $52.75/mt respectively from Dec 26. 

   

FOB Middle East

The February CP forecast for propane was revised up to $560/mt for propane owing to soaring crude prices early last week. After that, however, the February CP forecast was revised down to around $505/mt for propane and around $530/mt for butane as crude prices retreated and a pure propane cargo for end-February loading from Qatar emerged. A dive in the CFR Far East market was also seen as bearish factor. Nevertheless, buying interest for spot cargoes for second-half January through first-half February loading was strong. Bids for late January through early February loading even-split cargoes were heard at a level equivalent to a premium in the $30's/mt to the February CP. In addition, an even-split cargo from Kuwait was reported to have been traded at a premium of $25/mt to the February CP this week.

 

Asia Pressurized Market

For FOB South China cargoes, owing to a fall in wholesale prices in South China, sellers were apparently interested in spot-export. Offers were heard at a premium in the high $60's/mt to the February CP. In the CFR Vietnam market, supply/demand was tight. While domestic demand increased in Vietnam ahead of the Lunar New Year (TET) holidays, there were delays in cargo operations due to congestion with LPG vessels and petrochemical vessels in terminals in Haiphong. Under this situation, one importer from Haiphong bought 1,000mt for second-half January delivery at a premium of $105-108/mt to the January CP.

 

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