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Weekly SummaryJapan / China / Korea/International/Markets

LPG: Mar 30-Apr 3: Prices surge as demand increases and crude gains

CFR Far East

CFR Far East prices soared last week due to increasing buying interest and rebounding crude prices. Rim Asia Index as of Apr 2 was at $269.75/mt for propane and $289.75/mt for butane, up$45.25/mt and $65.25/mt respectively from Mar 26. For first-half May delivery, one 23,000mt propane cargo was traded at a premium of $8/mt to May CFR Far East quotations. Although the price was unknown, one 45,000mt propane cargo was apparently traded. 

 

FOB Middle East

The April CP was set at $230/mt for propane and $240/mt for butane last Tuesday. Just before the release, spot demand for even-split cargoes from India and Indonesia increased sharply and this caused the April CP to have been set above the market expectation. Spot demand from these countries was still firm thereafter. In India, more people stayed home in order to prevent the spread of COVID-19 and LPG demand for cooking seemed to be rising. On the other hand, LPG supply from domestic refineries was dwindling. With tight domestic supply/demand, three major Indian importers conducted buy tenders on a CFR India basis. 

 

Asia Pressurized Market

For FOB South China, one refrigerated cargo importer with a terminal in Dongguan could sell one cargo for second-half April loading at a premium in the low $60's/mt to the April CP. Buyers, however, were not interested in purchasing at this level. For CFR Vietnam, active buyers were not observed in the market. One South Vietnam importer and one importer from Haiphong saw their domestic sales sharply fall. Restaurants and entertainment centers were all closed across Vietnam and schools remained shut down. As a result, actual LPG demand apparently dropped by 50% from normal. Therefore, the South Vietnamese importer mentioned above had no plans to buy April delivery. 

 

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