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InternationalMarkets/Weekly Summary

LPG: Jul 6-10 : Supply/demand in FOB Middle East slackens further

CFR Far East

Rim Asia Index for propane and butane as of Jul 9 was at $333.25 per metric tons (/mt) and $328.25/mt, up $7.87/mt and $17.87/mt respectively from Jul 3 owing to rising crude prices and a recovery in buying interest. Buyers such as one Japanese trader were trying to cover their short-positions for pure propane cargoes. Moreover, since the CFR Far East market was in contango, buyers might saw merit to buy as soon as possible. As for cargoes containing butane for August delivery, buying interest from Korean players was firm. Two Korean importers were apparently seeking even-split cargoes.  

 

FOB Middle East

The expected August CP was revised up to about $345/mt for propane and about $335/mt for butane on account of robust crude prices. Nevertheless, spot supply was further increasing in the FOB Middle East market. One Qatari producer was expected to have room to sell a 44,000mt propane cargo or 44,000mt 75:25 cargo for second-half August loading. Moreover, one importer from East China could still sell a 45,000mt propane cargo for Aug 17-18 loading from Ras Laffan. Meanwhile, the results of a sell tender issued by Kuwait Petroleum Corp (KPC) were sketchy. Through the tender that had closed on Friday with validity on the same day, KPC was trying to sell a 44,000mt 75:25 cargo for Aug 4-5 loading.

 

Asia Pressurized Market

For FOB South China, talks for second-half July loading were slow to progress due to no active players seen in market. Meanwhile, refrigerated cargo importers apparently held high inventories and were keen to sell pressurized cargoes for August loading at a premium of slightly below $40/mt to the August CP. Regarding CFR Vietnam, spot demand was still weak. One importer from Haiphong would exercise minus tolerance on term cargoes for August delivery owing to dull domestic sales.

 

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