CFR Far East

In the CFR Far East market last week, prices declined due to perceptions of ample supply. The Rim Asia Index for propane and butane as of Nov 13 was at $626.00/mt, down $7.00/mt and $12.00/mt from Nov 8. Sources pointed out that supply for second-half December delivery was plentiful and this weighed on the spot market. One operator of a propane dehydrogenation (PDH) plant in South China procured a 46,000mt propane cargo for December delivery at a single digit discount to December CFR Far East quotations. Other than the winner, two more players seemed to have submitted offers for similar cargoes at a discount December CFR Far East quotations. Further, several sellers seemed to have room to offer even-split cargoes ex-Australia in the market for second-half December delivery and supply of cargoes containing butane was also seen to be ample.

FOB Middle East

For December loading, spot demand was not strong. As the CP was perceived to be relatively high, many players were not keen to buy on an FOB basis. Further, Indian importers were believed to have covered their demand for the rest of the year and had no room to purchase. On the other hand, players taking term cargoes from the Middle East considered reselling them. A Far East importer was interested to do an FOB/CFR swap for a 44,000mt 50:50 cargo. The December CP was forecast at about $616/mt for propane and about $611/mt for butane.

Asia Pressurized Market

For South China Asia loading, buyers were seen to be limited. Discussion levels for South China loading were reported to be at a premium in the high 50's to the CP, but some sources perceived that the market might move down going forward. In Vietnam, imports of LPG in November might not apparently increase. At the moment, domestic consumption was dull, according to some sources. In addition, a Vietnam petrochemical maker, Long Son Petrochemicals (LSP) stopped operations of its plants from mid-October and demand for industrial use was expected to reduce.