CFR Far East

　 The CFR Far East market sharply moved down from the previous week for both Japan and China delivery. As of Jul. 30, the Japan Index stood at $737.75/mt for propane, down $66.50/mt week on week, while butane was at $787.75/mt, down $16.50/mt. The China Index fell by $66.50/mt to $802.75/mt for propane and $16.50/mt to $852.75/mt for butane. Crude prices declined sharply after the exchange of attacks between the US and Iran temporarily subsided, placing downward pressure on CFR Far East prices. However, tensions in the Middle East escalated again at the start of the week, prompting a rebound in crude prices. In addition, soaring freight rates and congestion at the Panama Canal fueled concerns over reduced availability of prompt cargoes into the Far East market. Japanese importers and Chinese petrochemical companies also moved to procure September-delivery cargoes, supporting market sentiment toward the end of the week. In particular, butane supply became tighter, with sell tenders for cargoes containing butane conducted by Kuwait Petroleum Corporation (KPC) and INPEX reportedly attracting a large number of buyers.

FOB Middle East

　 Middle East-origin cargo availability remained limited. The exchange of attacks between the US and Iran resumed, making it increasingly difficult for vessels carrying cargoes loaded in the Middle East, including Iran, to transit the Strait of Hormuz. In addition, following attacks on certain tankers by Yemen's Iran-aligned Houthi forces, navigation through the Bab el-Mandeb Strait, which links the Red Sea and the Gulf of Aden, also became more challenging. Supplies of Middle East-origin cargoes via ship-to-ship (STS) operations at Sohar, Oman, were likewise shown signs of declining. Against this backdrop, KPC, which conducted six sell tenders during July, issued a new sell tender closing on Aug 4 for a 44,000mt 50:50 cargo on a delivered basis into Asia.

Asia Pressurized Market

　 In the pressurized cargo market, Discussion levels for South China loading remained weak. Sellers could not maintain a bullish stance after domestic market levels weakened in line with declines in crude oil prices and refrigerated cargo values. Buyers were also in no rush to procure cargoes, resulting in a slackening supply/demand situation. Meanwhile, no active sellers were seen for Southeast Asia loading. A Malaysian petrochemical company was heard to have canceled the sale of two cargoes previously sold to a Philippine importer. Some market sources suggested that operational problems at the company's residue fluid catalytic cracking (RFCC) unit could have been behind the cancellations. For delivery to Vietnam, buying interest was observed. Market sources reported that two cargoes for August delivery into Long An were traded at premiums of $190/mt and $210/mt to the August CP, respectively.