CFR Far East

In the CFR Far East market last week, prices for Japan delivery softened along with an increase in supply. As of Aug 7, the Japan Index for propane and butane moved down by $7.00/mt from Aug 1 to $508.00/mt and $498.00/mt respectively. Many sellers having 23,000mt propane cargoes were actively offering spot cargoes and this pushed down the market. Prices for delivery to China climbed since supply of cargoes of non-US was seen to be tight. The China Index advanced by $5.00/mt to $552.50/mt for propane and $522.50/mt for butane. Chinese players moved on spot purchase for cargoes of non-US origin and available cargoes were decreasing. Further, supply of cargoes of special-origin was said to be tight. Oriental Energy was trying to buy cargoes of non-US origin for Sep delivery and Fujian Meide, a propane dehydrogenation (PDH) plant operator in East China bought a Canadian propane cargo at a premium in the mid $20's/mt to the September CP.

FOB Middle East

Discussions for 44,000mt 50:50 cargoes for September loading decreased by $10/mt from last week to a discount of $35/mt to the September CP. There were many sellers for even-split cargoes and supply/demand was slackening. Indian Oil Corporation (IOC) bought a 45,000mt 50:50 cargo for September loading at a discount in the high $20's/mt to the September CP via a buy tender closed on Aug 5. This buying interest temporarily sent the market higher. But afterwards buying interest was not seen again. In addition, as Middle East/Far East freight rates significantly rose, this exerted downward pressures on the market on an FOB Middle East basis. In the meantime, discussions for October loading began. A Japanese importer and a European trader were looking for 44,000mt 50:50 cargoes at a discount of $30-45/mt to the October CP.

Asia Pressurized Market

For South China loading, an importer in Thailand operating terminals in Zhuhai and Shantou was said to have room to sell spot cargoes for August through September loading. The importer was apparently offering spot cargoes for October delivery to the Philippines at prices considerably lower than term prices. In Southeast Asia, a Chinese petrochemical company operating a refinery in Brunei was said to have sold a 2,500mt LPG cargo for Aug 12-13 loading. It was reported that the buyer was one major supplier in Malaysia. The company bought the cargo on an FOB basis to use its own vessel. The cargo would be supplied to its term customers. On the other hand, information was also heard that the supplier in Malaysia could offer spot cargoes for Malaysia loading.