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Weekly Summary

LPG: Jan 13-17: CFR Far East prices rebound on tight supply/demand

CFR Far East

The CFR Far East market rebounded on tight supply/demand. As of Jan 17, the Rim Asia Index for propane and butane was at $547.25/mt and $601.75/mt, up $6.00/mt and $26.00/mt respectively from Jan 10. Several buyers were looking for pure propane cargoes ex-US. On the other hand, in the US Gulf Coast, Houston Ship Channel was closed along with fog. Therefore, the arrival of cargoes from the US to the Far East were expected to be delayed. Under this situation, several sellers were seen to have room to sell pure propane cargoes ex-US but these sellers were apparently in the midst of checking the delivery dates of cargoes and offered at levels that were higher than bids by $10/mt or above. Meanwhile, spot demand for butane was strong. Several buy tenders for even-split cargoes on a CFR basis were issued from India and Indonesia.

 

FOB Middle East

The February CP forecast for propane was revised up to $525/mt last Wednesday due to strong spot demand. Thereafter, however, anticipations that US-China trade friction would ease and no quantity restrictions on term cargoes for February lifting imposed by Saudi Aramco caused that to fall to about $500/mt. On the other hand, the spread between butane and propane in the February CP forecast widened to $40-45/mt as spot demand for cargoes containing butane from India and Indonesia strengthened. For spot discussions, a pure propane cargo for end-February loading was reportedly sold at a premium of $20/mt to the February CP to an importer from East China.

 

Asia Pressurized Market

For FOB South China cargoes, some sellers with high inventories could reportedly sell first-half February loading at a premium in the mid $70's/mt to the February CP. Meanwhile, active buyers were not seen in the market. In the CFR Vietnam market, one importer from Haiphong showed no interest in buying February delivery to Haiphong at present. Bearish sentiments spread that the March CP might be significantly below the February CP. Further, since LPG demand for industrial use might be weak for 15-20 days after the Lunar New Year (TET) holidays, sources pointed out that these factors dampened buying interest.

 

Sample Report

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