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Japan / China / KoreaInternational/Markets/Weekly Summary

LPG: Dec 9-13: Strong demand leads to prices rising

CFR Far East

The CFR Far East market strengthened last week owing to strong demand. The Rim Asia Index rose to $540.25/mt for propane and $567.75/mt for butane as of Dec 12, up $36.75/mt from Dec 6. Several traders were seeking 23,000mt propane cargoes to cover their short positions. Among them, two European traders had procured pure propane cargoes from one East China importer and one North Sea producer. In addition, one Japanese trader and one Japanese importer also had interest in procuring 23,000mt propane cargoes. Buying interest was strong but sellers apparently worried about heavy fog in the USGC and refrained from showing firm offers. Further, most western traders that had cargoes on hand were expected to retreat to the sidelines in late December. With spot supply and the business days limited, active buyers bid up in pursuit of sellers. 

 

FOB Middle East

The January CP forecast was revised up to around $480/mt for propane and around $500/mt for butane last Thursday due to tight supply/demand in the CFR Far East market. In the spot market, spot demand from India emerged and buying interest was strong. Nevertheless, since the February CP was seen to move below the January CP, discussion levels for first-half January loading were wide apart from those for second-half January loading.

 

Asia Pressurized Market

For FOB South China cargoes, buyers reportedly bid for second-half December loading at a premium in the low $60's/mt to the December CP. However, sellers were not keen on selling at this level amid firm domestic sales. Some sellers seemed to be able to sell at a premium in the high $60's/mt to the December CP. In the CFR Vietnam market, one importer from Haiphong had low inventories and could purchase 500mt for December delivery at a premium in the low $90's/mt to the December CP. 

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