The price of propane cargoes for delivery along the Singapore-Japan route 30-45 days forward dipped to a 26-week low Wednesday due to lackluster demand amid ample supply, trade sources said Thursday.
The price of propane cargoes for first-half June delivery fell $34.50/mt from Monday -- Tuesday was a public holiday -- to 789.50/mt Wednesday, a 26-week low. Platts data showed that the last time that firstline CFR Singapore-Japan propane prices were assessed any lower was on October 20, 2011, at $768/mt, data showed.
"There is very little demand ... the Japanese are still more or less holding back, and there is not much trader demand, either," a Singapore-based Western trader said, adding that impending supply from the Middle East has further accentuated weak market sentiment.
Lull demand coupled with generous supply has driven LPG values in Northwest Europe lower, and trade sources have said they felt this would lead to very little, if any, product from the Middle East moving West.
As a result, almost all May-loading LPG from the Middle East is likely to head East, where prices are relatively firm. Finding outlets for all the Middle Eastern tons would imply prices in the East would have to fall, sources said.
A weekly report from UK-based shipbroker Gibson late last week said at least 528,000 mt of May-loading spot LPG -- in 12 cargoes of 44,000 mt -- from the Middle East has yet to find homes in the East. The volume would increase further if traders decided to re-sell their May-loading term cargoes, the report added.
The price of butane cargoes fell to an 18-week low Wednesday, although it lagged the fall in propane. The price of H1 June delivery butane cargoes fell $29.50/mt from Monday to $899.50/mt Wednesday. The previous low for firstline CFR butane was $893/mt on December 19, 2011, data showed.
The slump in propane also saw the price of firstline evenly split LPG fall to an 18-week low of $855/mt Wednesday. The previous low for firstline CFR 11/11 cargoes was $852.50/mt on December 16, 2011, data showed.
