CFR Far East

In the CFR Far East market last week, prices for Japan and China delivery went up along with tight supply/demand and an upward revision of the CP forecast. As of Nov 27, the Japan Index for propane and butane climbed by $27.50/mt and $56.50/mt from the previous week to $537.00/mt and $587.00/mt respectively. The China Index for propane and butane moved up by $13.00/mt from the previous week to $576.50/mt and $559.50/mt. For propane, many buyers such as Japanese and South Korean importers, traders and petrochemical companies were trying to buy pure propane cargoes for January delivery while supply was thin. Some sellers with US cargoes planned to sell them to Southeast Asia and India, and considered moving their vessels to Asia via the Cape of Good Hope instead of the Panama Canal. Even if these cargoes were sent to the Far East, the arrival timing would be delayed and supply for January delivery was perceived to be tight. Regarding butane cargoes, butane prices in the US were higher than propane prices and sellers in the Far East were hardly observed. Under this situation, discussion levels for butane cargoes were significantly higher than those for propane cargoes, according to sources.

FOB Middle East

Supply from the Middle East was said to be limited and available cargoes were not seen in the spot market. A Kuwaiti gas supplier seemed to have requested term customers to change the propane/butane ratio of their term cargoes loading in January. One Far East importer received requests to change its term cargo from propane-rich to butane-rich. Not only supply from Saudi Arabia, but also that from Kuwait was perceived to be tight. On the demand side, one European trader was looking for even-split cargoes for early December and early January loading, but no counter-offers were heard.

Asia Pressurized Market

For South China loading, offers were heard at a premium of around $60/mt to the December CP. Although buyers were seen in the market, they were cautious about high prices and were inactive in entering spot discussions. In the Philipines, one importer would take a cargo from Tanjung Sulong in early December. Information was heard that the importer had concluded a term supply contract with one major supplier in Malaysia from the same loading point. However, it was unclear if the cargo for early December loading would be supplied via the term contract or not.