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Asian LPG prices slid to near 28-month lows

Asian LPG prices slid to near 28-month lows

BEIJING: Asian LPG prices lowered to near 28-month lows, with CFR South China refrigerated cargoes assessed at $684/mt for propane and $679/mt for butane, down 3-5% from last Thursday’s $706/mt and $711/mt, respectively, Platts data showed.

Both imported and domestically produced LPG prices dropped in South and East China in a week, mainly weighed down by the bearish market outlook.

Trade sources attributed the fall in Asian LPG prices to bearish sentiment amid a persistent oversupply and tepid North Asian winter demand.

In South China, propane-rich imported LPG was said to have traded at around Yuan 5,600-5,700/mt ($911.50-927.78/mt) this week, down further by Yuan 50/mt from around Yuan 5,650-5,750/mt last week.

The price was mainly dragged down by lower trading levels in east Guangdong, where imported LPG was traded at around Yuan 5,500-5,600/mt this week due to a glut of arriving imports in the region, market sources said.

Two major LPG import terminals — Chaozhou Ouhua and Shantou Siamgas — in east Guangdong each received 22,000 mt of LPG cargo this week, which has weighed heavily on regional LPG prices, market sources said.

“There are only two major LPG import terminals in the region … and they both received imported arrivals at the same time, resulting in oversupply in the market,” a source said.

Propane-rich imported LPG was said traded at around Yuan 5,600-5,700/mt in the Pearl River Delta this week, also down slightly by Yuan 30-50/mt from last week amid bearish market outlook, said local trade sources.

Many third-tier LPG distributors were said to have continued to run on relatively low inventories, monitoring the market movement this week.

“Buyers still took a wait-and-see stance as LPG prices are expected to fall further in the near future due to lower imported cost for the later arrivals,” a second source in the Delta said.

Import cost for H2 November delivery refrigerated cargoes is estimated to be less than Yuan 5,000/mt on a CFR China basis, Platts calculation showed.

Meanwhile, domestically produced LPG was traded at around Yuan 5,550-5,650/mt in South China Friday, down slightly by around Yuan 25/mt from a week ago, according to local trade sources.

The domestic grade traded Friday at Yuan 5,600-5,690/mt in the Pearl River Delta, and at Yuan 5,500-5,550/mt and Yuan 5,520-5,600/mt in the east and west Guangdong, respectively, trade sources noted.

Sinopec Guangzhou lifted LPG prices by Yuan 60/mt to Yuan 5,690/mt this week, followed by Sinopec’s other affiliated refineries in the province. But small terminals in the region did not follow suit amid weak buying interest, trade sources said.