Asian LPG demand up but profit down<\/p>\n
SINGAPORE (Reuter): Liquefied petroleum gas (LPG) prices are
\nexpected to recover ahead of peak fourth quarter demand in Asia,
\ntraders said.<\/p>\n
But they said they were not bullish about winter profits in
\nChina, despite projections of a large rise in imports.<\/p>\n
Profit margins have dropped tremendously from last year as
\nmore players cash in on the Chinese LPG market, they added.<\/p>\n
China imported 170,000 tons of LPG in June and close to
\n160,000 tons in July. The country imported a total of 1.1 million
\ntons between January and July. Imports in the fourth quarter are
\nexpected to rise 30 to 40 percent from the summer.<\/p>\n
However, August premiums over the Contract Price (CP) have
\nbeen halved to US$55-60 per ton from last year's US$120-130. CP
\nrefers to the Saudi contract price, the industry benchmark.<\/p>\n
September premiums have recovered slightly from August, with
\nimports into South China discussed around CP plus $60-65 C and F.
\nIndicated prices in Nantong and Shanghai are similar.<\/p>\n
Typhoon Kent, which swept the South China coast last week,
\ndisrupted discharging schedules of LPG vessels, traders said.<\/p>\n
\"But there were no major hiccups, just a couple of days of
\ndelay,\" said one Chinese supplier.<\/p>\n
In the spot market, the Petroleum Authority of Thailand has
\nsold about 2,000 tons of pressurized LPG to a Singapore-based
\ntrading company that had just started to trade LPG, an industry
\nsource said.<\/p>\n
The deal was concluded at CP plus $7 FOB Sri Racha. PTT
\nintends to export another 4,000-5,000 tons in September. The
\ncompany will not tender for the sale but will negotiate directly
\nwith interested buyers. Indonesia has floated a tender on Tuesday
\nfor the sale of between 120,000 tons and 135,000 tons a year of
\npressurized LPG FOB Santam, Indonesia.<\/p>\n
Term discussions between Malaysia and Japan for up to 480,000
\ntons of LPG are in the final round. Four firms have already
\nfinalized agreements and term deliveries are to begin next month.
\nOnly two Japanese firms, Idemitsu and Nippon Petroleum Gas
\nCompany (NPGC) have yet to conclude a deal.<\/p>\n
Easing<\/p>\n
In Singapore, September premiums have eased by around $20 to
\n$5-10 over CP, C and F Singapore, said a Japanese trader here. In
\nthe middle east, an Abu Dhabi Gas tender to sell up to 450,000
\ntons of refrigerated LPG from October 1995 to November 1996 was
\nawarded to Geogas at a premium of 50 cents to 90 cents over CP,
\nFOB Das Island, sources said.<\/p>\n
Iran's closed tender to sell up to 40,000 tons of refrigerated
\nLPG was awarded to Japanese trading house Tomen Corp, traders
\nsaid.<\/p>\n
The cargo, for loading on October 2-5, was heard to have been
\nsold at $134 for propane and at $140 for butane FOB Iran.<\/p>\n
The sources said Tomen had no import license into Japan and
\nmay have concluded the purchase of the contract on behalf of a
\nmajor oil company.<\/p>\n
But the major said to be involved denied the market talk and
\nTomen declined to comment.<\/p>\n
The September Saudi CP was unchanged from August CP. Propane
\nis pegged at $147 FOB Ras Tanura and butane at $155. Most traders
\nexpect the October CP to increase.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/asian-lpg-demand-up-but-profit-down-1447893297",
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