CFR Far East

　 The CFR Far East market plunged for both Japan and China delivery. As of June 18, the Japan Index fell sharply by $133.50/mt week on week to $601.00/mt for propane, while butane also dropped steeply by $183.50/mt to $601.00/mt. The China Index declined by $151.50/mt to $666.00/mt for propane and by $201.50/mt to $666.00/mt for butane. The declines reflected lower crude prices following a final agreement between the United States and Iran. Butane saw a larger drop than propane due to stronger oversupply pressures, with cargoes from the Middle East outside the Persian Gulf and Australia available for sale. In discussions for pure propane cargoes, petrochemical companies in North and East China moved to procure propane for PDH plants. However, sellers holding US-origin cargoes outnumbered buyers, resulting in a loose supply/demand balance. In the United States, one supplier has completed expansion works at its export terminal, and exports, particularly of propane, were expected to increase.

FOB Middle East

　 In spot discussions for Middle East-origin propane/butane cargoes of 44,000mt 50:50 cargoes, market levels softened. As of Jun 18, June-loading cargoes were assessed at discounts of $25-35/mt to the June CP, while July-loading cargoes were at premiums of $25-35/mt to the July CP, both down by $7/mt from the previous week. Selling interest via STS (ship-to-ship) operations off Sohar, Oman, increased. On the other hand, buyers such as Indian players maintained a cautious procurement stance, with no signs of active buying for cargoes priced at flat to CP or above. Emerging signs of a reopening of the Strait of Hormuz also appeared to have dampened near-term buying interest. Against this backdrop, a Kuwait-based gas company was heard to have sold a 44,000mt 75:25 cargo for June loading into South China.

Asia Pressurized Market

　 For South China loading, some buyers were seeking spot cargoes while more sellers were seen in the market. Several importers of refrigerated cargoes could offer cargoes for July loading and offer levels dropped to a premium of $150/mt to the July CP later last week. In the Philippines or countries in South Asia, end-users were using other fuels such as electricity and LPG demand was receding. In Vietnam, a major supplier was trying to digest inventories and offering actively in the domestic market as the CP forecast for July was revised down and the refrigerated cargoes market also moved down. On the other hand, Dung Quat refinery carried out a sell tender for July-December lifting closing on Jun 20.