CFR Far East

The CFR Far East market plunged for both Japan and China delivery. As of Jun 11, the Japan Index fell by $95.75/mt from the previous week to $734.50/mt for propane and $784.50/mt for butane. The China Index also dropped by $95.75/mt to $817.50/mt for propane and $867.50/mt for butane. This reflected a sharp decline in crude oil prices. In addition, the loosening supply/demand balance was also cited as a bearish factor. Propane demand from Japan and South Korea declined, while buying interest from Chinese players was also lackluster. Weak demand from India or Southeast Asia led to more US-origin cargoes containing butane flowing into the Far East market, weighing on prices. For US loadings, transportation costs increased, resulting in a series of cancellations of July-loading cargoes. Some market sources pointed out that this could lead to a reduction in supply for August Far East delivery.

FOB Middle East

In spot discussions for 44,000mt 50:50 cargoes, market levels fell sharply. As of Jun 11, cargoes for June loading were discussed at a discount of $32-42/mt to the June CP, while July-loading cargoes were at a premium of $50-60/mt to the July CP, both declining significantly from the previous week. Several cargoes involving STS (ship-to-ship) operations off Sohar, Oman were offered in the market. One gas producer in Kuwait and one Abu Dhabi-based gas company were able to offer June-loading cargoes at a premium of $100/mt to the July CP. However, Indian importers which were considered key potential buyers showed thin interest at such levels. As a result, there was also information that one Abu Dhabi-based gas company privately lowered its offer to a premium of $60/mt to the July CP in an attempt to sell to Indian importers.

Asia Pressurized Market

For South China loading, several refrigerated cargo importers had room to sell cargoes for second-half June loading. However, buyers did not have interest in entering discussions and sellers were gradually lowering their offers amid weak buying interest. Later last week, offers were reported at a premium in the $170's/mt to the June CP. In Southeast Asia, importers in the Philippines did not seek spot cargoes since they could meet demand with term pressurized cargoes and refrigerated cargoes. Although an earthquake struck off the coast of Mindanao in the southern Philippines on Jun 8 and supply in some areas was expected to be affected, no importers in the country moved to procure additional cargoes. In Vietnam, one major supplier received a refrigerate cargo in Southern Vietnam and actively offered in the domestic market.