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LPG: Jan 7-11: Butane prices surging on active buying interest

2019/01/14 07:00

CFR Far East

   The spread between butane and propane widened to about $40/mt this week in the CFR Japan market. For propane, ample supply for cargoes of US origin was cited as a bearish factor. Meanwhile, butane prices rose as spot demand for cargoes containing butane of non-US origin from China was firm. In the market, a 23,000mt propane cargo for first-half February delivery was traded at a premium in the mid $10s/mt to the February CP on Wednesday. Discussion level for CFR China was reported at a premium in the mid $30s/mt to $40/mt to the February CP. 

 

FOB Middle East

  The January CP was expected to be at about $415-420/mt for propane and about $435-440/mt for butane. Qatar Petroleum for the Sale of Petroleum Products Company Limited (QPSPP) offered a Feb 11-15 loading 45,000mt propane cargo via a tender. The tender would close next Tuesday at 12:00 with validity until at 17:00 both local Doha time. Further, one European trader offered a 44,000mt 50:50 cargo for end-February loading at a premium of $10/mt to the February CP. On the other hand, several buyers such as some traders, Chinese importers and Indian importers apparently showed interest in spot purchase.

 

Asia Pressurized Market

   For FOB South China, sellers were not keen on spot sales due to low inventories. Discussion levels rose to a premium of $50-55/mt to the January CP in view of scarce supply. Regarding CFR Vietnam, owing to robust domestic demand in Vietnam, several importers showed interest in buying spot cargoes. Discussion levels were heard at a premium of $90-95/mt to the January CP. 

 

Japan Domestic Market

   In the truck market, spot cargoes for January lifting were discussed at Yen 57,300-57,500/mt for propane and Yen 54,400-54,500/mt for butane. Due to plentiful supply, the market softened in late week. On the other hand, as the expected February CP had been recently revised up, one importer maintained its spot supply prices in the low-mid Yen 58,000s/mt for propane and the low-mid Yen 54,000s/mt for butane.

 

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