CFR Far East

In the CFR Far East market last week, prices weakened due to slack supply/demand fundamentals. The Rim Asia Index for propane and butane as of Dec 5 was at $616.50/mt and $606.50/mt, down $7.25/mt and $17.25/mt from Nov 29. Perceptions of loose supply/demand of butane cargoes were heighetning and market sources believed that butane cargoes were traded at lower prices than propane cargoes. Regarding discussions for January delivery, several sellers were seen while buying interest from Japanese or South Korean importers was thin. Spot demand from Chinese players was also seen to be limited and only two operators of propane dehydrogenation (PDH) plants were trying to buy spot cargoes. For 23,000mt propane cargoes for first-half January delivery to Chiba, offers dropped to flat to January CFR Far East quotations (equivalent to $611/mt or a discount of $14/mt to the January CP as of Dec 6).

FOB Middle East

The January CP was forecast at about $625/mt for propane and about $620/mt for butane. For January loading, supply was perceived to be ample. Some players taking term cargoes from the Middle East seemed interested to resell them on an FOB basis. Further, a Qatari producer, a Kuwaiti producer and a Middle East trader affiliated to an Abu Dhabi producer apparently had room for spot sale. On the other hand, buying interest was thin and active buyers were not seen. Only one trader from the Middle East was looking for a 44,000mt 50:50 cargo. Amid slack supply/demand a 44,000mt 50:50 cargo for January was apparently traded at a discount of $14/mt to the January CP. The buyer was believed to be a British Major.

Asia Pressurized Market

Demand for South China loading was apparently not rising. A Vietnamese importer was not seeking spot cargoes as the importer had plentiful stocks. For Southeast Asis loading, Pengerang Refining and Petrochemical (PRefChem), a Malaysia petrochemical maker, reportedly restarted one of the residual oil fluid catalytic cracking equipment (RFCC) at its refineries on Dec 2. PrefChem was said to have room to sell extra cargoes for loading in December as shipments of petrochemical products were yet to be smooth. In Vietnam, sales in the domestic market became lackluster ahead of Lunar New Year Holidays (Tet).