CFR Far East

The CFR Far East market extended gains from the previous week for both Japan and China delivery. As of Jul 9, the Japan Index stood at $642.00/mt for both propane and butane, up $36.50/mt from the previous week. The China Index rose by $4.25/mt week on week to $674.50/mt for both propane and butane. Renewed tensions in the Middle East, as the US and Iran exchanged attacks, contributed to a sharp spike in crude prices at one stage. This provided support to the LPG market. In addition, active procurement by Chinese players tightened the supply/demand balance in the CFR Far East market, further supporting prices. Propane demand into China had also been increasing, as operating rates at propane dehydrogenation (PDH) plants in the country continued to rise.

FOB Middle East

For Middle East loading, renewed tensions in the Middle East reignited concerns that the Strait of Hormuz could effectively be closed. Shipowners remained reluctant to send vessels into the Persian Gulf. Against this backdrop, Kuwait Petroleum Corporation (KPC) moved to sell two cargoes on a CFR basis through sell tenders. The company conducted a tender closing on Jul 6 for a 44,000mt 75:25 cargo and another tender closing on Jul 8 for a 44,000mt 50:50 cargo. Both tenders were reportedly awarded. However, information regarding the award prices was mixed. Amid the uncertainty surrounding the Middle East situation, some market sources viewed that the cargoes were awarded on the July CP basis, which had already been released, rather than on an August CP basis, which remained difficult to forecast.

Asia Pressurized Market

In discussions for pressurized cargoes loading from South China, discussion levels for August loading had fallen by $10/mt from the previous week to premiums of $90-100/mt to the August CP as of Jul 9. A Thai refrigerated cargo importer moved on sales for August loading from South China at a premium of $100/mt to the August CP. However, buying interest remained weak and no deal appeared to have been concluded. The importer was also heard to have held available cargoes for second-half July loading, with information indicating that a cargo was sold at a premium of $90/mt to the July CP.