CFR Far East

In the CFR Far East market last week, propane prices for Japan softened due to an increasing in sellers. As of Aug 28, the Japan Index for propane moved down by $5.00/mt from the previous week to $529.00/mt. That for butane was up by $5.00/mt to $539.00/mt since supply/demand of butane cargoes was tight. Sellers having cargoes for second-half September delivery rushed into spot sales and discussion levels for 23,000mt propane cargoes declined to a discount of $13/mt to September CFR Far East quotations (equivalent to $518/mt or a premium of $2/mt to the September CP as of Aug 27) in the middle of last week. The China Index for propane advanced by $9.50/mt to $574.00/mt while that for butane weakened by $14.00/mt to $554.00/mt. Several operators of propane dehydrogenation (PDH) plants in China tried to buy propane cargoes while a trader in the Middle East moved on spot sales for butane cargoes. The possible discussion levels for cargoes of non-US origin for delivery to East China were at a premium in the $50's/mt to the CP.

FOB Middle East

The September CP was expected to be below the August CP. In the FOB Middle East market, spot cargoes were discussed at a discount to the September CP and sources believed that supply/demand was not tight. Further, some cargoes for US loading were supplied into India and demand for Middle Eastern cargoes from India was not strong. This was also cited as a bearish factor on CP prices. Under this situation, sources expected that the September CP might be set at $515/mt for propane and $495/mt for butane. For October loading, several players were seeking 44,000mt 50:50 cargoes and bids were heard at a discount in the low $20's/mt to the October CP.

Asia Pressurized Market

For South China loading, sellers had room to offer spot cargoes while they did not actively offer in the spot market. Procuring costs for refrigerated cargoes were high and the sellers did not want to lower selling ideas, according to sources. For Southeast Asia loading, one petrochemical company, Pengerang Refining and Petrochemical(PRefChem) carried out a sell tender that had closed on Aug 25 for a 2,500mt of LPG cargo including 300mt of raffinate for Aug 27-28 loading. Sources believed that the cargo was awarded, but the detailes were unknown. On the other hand, PRefChem had also issued a sell tender that had closed a week earlier for two 2,500mt LPG cargoes including 300mt of raffinate for Aug 24-25 and 25-26 loading.