CFR Far East

The CFR Far East market softened for both Japan and China delivery. As of May 28, the Japan Index fell by $58.50/mt from May 21 to $829.50/mt for propane and $929.50/mt for butane, while the China Index declined by the same amount to $921.50/mt for propane and $1,021.50/mt for butane. The downturn reflected a sharp drop in crude prices amid views that negotiations toward ending hostilities between the US and Iran were progressing. The easing of supply/demand conditions in the CFR Far East market also weighed on prices, as Chinese players deferred procurement due to a perception of elevated prices. Meanwhile, USGC-Far East freight rates surged sharply, narrowing arbitrage to the Far East. As a result, a number of US-loading term cargoes were canceled, leading to expectations among some sources that supply into the CFR Far East market could decline going forward.

FOB Middle East

For Middle East loading, reopening of transit through the Strait of Hormuz amid progress in peace negotiations between the US and Iran was expected. One Abu Dhabi-based gas producer was reportedly offering cargoes for Fujairah loading in June. The company was perceived to be planning to load LPG in Ruwais, transit the Strait of Hormuz, and conduct an STS operation in Fujairah. In addition, a Kuwaiti gas producer requested term customers to lift term cargoes for June loading. As a result, one Indonesian state-owned company was trying to secure a spot vessel for Mina Al Ahmadi loading in early June. Meanwhile, Saudi Aramco announced the June CP on May 25, with propane set at $760/mt, up $10/mt from the previous month, and butane at $820/mt, up $20/mt.

Asia Pressurized Market

For South China loading, several cargoes were traded last week at a premium of $190-210/mt to the June CP. After that, there were available cargoes in the spot market. Several Chinese importers of refrigerated cargoes and a Thai importer seemed to have room to sell spot cargoes. On the demand side, importers in the Philippines did not seek spot cargoes actively and no fresh deals for the country were heard. Information was only heard that buyers seeking spot cargoes for Bangladesh delivery were appearing, but their buying ideas were significantly lower than the current market level.