CFR Far East

The CFR Far East market declined week on week for both Japan and China delivery amid easing supply/demand fundamentals. The Japan Index stood at $674.75/mt for propane and $724.75/mt for butane, while the China Index was assessed at $739.75/mt for propane and $789.75/mt for butane. For Japan delivery, buying interest from traders for propane cargoes for second-half September delivery was seen in the market. However, sellers emerged and deals were concluded, leading buyers to gradually step away from the market. Japanese importers were also fulfilling their September propane requirements, reducing the number of active buyers. Meanwhile, the spread between naphtha and LPG narrowed compared with earlier levels, resulting in weaker demand for LPG as a petrochemical feedstock. However, propane demand was expected to remain relatively firm, as operating rates at China's propane dehydrogenation (PDH) plants were reportedly heard to have risen to above 75%.
　
FOB Middle East
Progress was seen in peace negotiations between the US and Iran, raising expectations for the reopening of the Strait of Hormuz and a recovery in supplies of Middle East-origin cargoes. Against this backdrop, Indian importers apparently began preparing to lift Middle East-origin cargoes, including positioning their own vessels outside the Strait of Hormuz. Meanwhile, Middle Eastern gas producers continued to market cargoes through ship-to-ship (STS) operations. One Qatari gas producer was heard to have already sold a cargo via STS operations in August. Kuwait Petroleum Corporation (KPC) was also said to have awarded a new sell tender that had closed on Aug 6. The company was offering a 44,000mt 75:25 cargo for second-half August delivery to Chiba through a sell tender.
　
Asia Pressurized Market

In the pressurized cargo market, several refrigerated cargo importers sold spot cargoes for first-half August loading. The deal level was heard at a premium of $140/mt to the August CP. Meanwhile, spot demand from Vietnam emerged in the market and the FOB South China market also moved up. One importer procured spot cargoes for September delivery to cover its short positions. However, domestic demand in Vietnam was not that strong since the September CP was expected to be set lower than the August CP. Along with this, tank storage was seen to be high and there were congestions at Haiphong ports.