RIM Market News >  Weekly Summary

LPG: Aug 5-9: Prices fall as perceptions of slack supply/demand heighten

2019/08/12 07:00

CFR Far East

The CFR Far East market extended losses last week on the back of falling crude prices as well perceptions of plentiful supply. Rim Asia Index on Aug 8 was at $366.50/mt for propane and $376.50/mt for butane, down $30.50/mt and $20.50/mt respectively from the previous week ending Aug 2. In particular, propane prices considerably dropped due to slack supply/demand. Japanese and Korean importer lacked room to buy pure propane cargoes for first-half September delivery due to retreating domestic demand along with the searing heat after having bought August delivery in order to build up inventories. Moreover, there were few traders trying to cover their short-positions in the market. Therefore, sellers with cargoes on hand tried to stimulate demand by lowering their offers further.

 

FOB Middle East

   The September CP was expected to be at $330-335/mt for propane and $340-345/mt for butane. With declining crude prices, the expected September CP was revised down from the level in the previous week. Nevertheless, with demand from India which was ahead of a festive season recovering, it limited the magnitude of the loss, compared to CFR Far East prices. Moreover, a decline in freight rates also cut the fall in the FOB Middle East market.

 

Asia Pressurized Market

   As most traders already covered their demand for August lifting, talks were muted. In the FOB South China market, offers for second-half August loading were reported at a premium in the low $50’s/mt to the August CP but no firm bids were reported. Only some traders were said to contemplate spot purchase to cover their short-positions. Meanwhile, some sellers for second-half August delivery to Haiphong, Vietnam apparently offered at a premium at $92/mt to the August CP, similar levels to existing term supply contract. 

 

 LPG (English) report sample 

 

Tokyo : LPG Team  Koyashiki  +81-3-3552-2411
Copyright©2019 RIM Intelligence Co. ALL RIGHTS RESERVED.
facebook      twitter

About SSL?