LPG: Feb 5-9: Firm buying interest pushes up market
CFR Far East
In the CFR Far East market last week, prices gained as recovering buying interest. The Rim Asia Index was at $612.50/mt for propane and $652.50/mt for butane as of Feb 8, up $30.00/mt and $54.00/mt respectively from Feb 2. Supply/demand of butane cargoes was tighter propane cargoes. Thus, a rise in butane prices was larger than that for propane prices. Traders were looking for propane cargoes in the spot market and buying interest from China appeared. A 23,000mt propane cargo for first-half March delivery was traded on Feb 6 at a premium of $8/mt to March CFR Far East quotations (equivalent to $607/mt or a premium of $6/mt to the March CP as of Feb 6). Apart from that, two operators of propane dehydrogenation (PDH) plants in South China and East China procured 46,000mt propane cargoes. For butane, INPEX carried out a sell tender on a CFR basis. Sources reckoned that a 44,000mt 50:50 cargo might have been awarded at a premium in the high single digit to mid-high $10's/mt to the March CFR Far East quotations.
FOB Middle East
The March CP forecast was revised up to around $610/mt for propane and at around $620/mt for butane along with strong crude oil prices and heightening buying interest. Hindustan Petroleum Corporation Limited (HPCL) was trying to buy two 44,000mt 50:50 cargoes through a buy tender, but the importer cancelled its buy tender. Information was heard that HPCL might have procured two 44,000mt 50:50 cargoes for March loading from one Qatari producer and a Middle East trader affiliated to an Abu Dhabi producer, respectively. However, some players reckoned that these might be additional term supply that HPCL had secured. In addition, a North Sea producer was said to have purchased a 44,000mt 50:50 cargo from a British Major at a premium of $8-10/mt to the March CP recently.
Asia Pressurized Market
On an FOB South China basis, one seller had room for spot sale. However, talks were slow to progress as few buyers were observe. In Southeast Asia, spot cargoes were available. A Malaysian petrochemical company carried out a sell tender for two cargoes loading in first-half February. One of the cargoes was apparently sold but it was unclear if the second cargo was awarded or not. Further, a Thai refinery also issued a sell tender for two cargoes loading March.