Exports of LPG from Iran to Asia eased to 264,000 mt in six cargoes for October loading, after rebounding to around 309,000 mt in September, with all shipments slated for China, shipping sources said Wednesday, October 15.
The October-loading program will take total exports from Iran since January to around 2.36 million mt, of which 1.96 million mt was for China, while the rest were shipped to India, South Korea and Southeast Asia, figures obtained from shipping sources showed.
LPG shipments from Iran, which resumed in May 2013 after an eight-month pause on concerns over an EU ban on shipping insurance, reached a high of around 319,000 mt in May after breaching above 300,000 mt in April, indicating that the Middle Eastern producer was almost returning to export volumes seen before the July 2012 sanctions, sources said.
Iran was able to continue exports due to its access to vessels while Chinese companies have also been building up a fleet of very large gas carriers, sources said.
With four Chinese propane dehydrogenation plants already in operation over the past year -- and two more due by mid-2015 -- the availability of cheaper LPG from Iran offers these plants a wider choice as they also import from the US, as well as major Middle East producers the United Arab Emirates, Qatar, Kuwait and Saudi Arabia.
Up to August, China imported a total 4.226 million mt of LPG, not including from Iran, customs data showed.
Jovo Energy, an importer and distributor of LPG in southern China, is slated to load two 44,000-mt cargoes from Iran this month under its annual term contract, on board the VLGCs Gas Crystal and Sea Dragon, sources said.
The 48,980-dwt Gas Crystal, owned by Sinogas Management, is now in the Arabian Sea en-route to Fujairah, after leaving Shekou, in Shenzhen, September 26, according to Platts ship tracking software cFlow.
The 50,357-dwt Sea Dragon, formerly Oval Nova, is in the Persian Gulf, after leaving Tianjin September 12, cFlow shows.
Hong Kong-based Triliance Petrochemical Co., is carrying a cargo aboard the 49,242-dwt Carmen, formerly Sam Russ.
The VLGC is now off the Indian West Coast en-route to the Khor Fakkan waiting zone in the Persian Gulf, after departing from Raoping, in southern Guangdong province September 30, cFlow showed.
Alpine International, a trading firm which has been regularly moving Iranian LPG to Asia since February, will load a cargo on board the VLGC Alpha, which is owned by Sinochem International, sources said.
The 53,208-dwt Hong Kong-flagged vessel, formerly Jeanne-Marie, departed from Jiangyin, near Shanghai October 2, and is now off the Indian West Coast, according to cFlow.
Alpine International will also load a cargo on board the 49,618-dwt Gas Jasmine, which left Zhapu port in Zhejiang province September 29 and is currently off India's south west coast en-route to Khor Fakkan, cFlow showed.
Thailand's Siamgas is moving a cargo aboard the 51,466-dwt Schumi after departing the Persian Gulf early October and is now off Sri Lanka en-route to Singapore, cFlow showed.
The vessel last departed August 30 from China's Zhuhai Gaolan port, where Siamgas has a 200,000-cubic-meter underground LPG storage.
AMPLE SUPPLY TO CHINA
Trade sources said some Iranian parcels have also been resold to the spot market in recent months, while ample supplies have also seen two shipments facing discharge delays off China's coasts end-September.
Recently, a unit of crude oil importer Zhuhai Zhenrong -- Guangdong Zhenrong -- which has a term deal with Iran was heard to have sold a 10,000-mt parcel to a domestic buyer, sources said.
Iran's main LPG exporter Petrochemical Commercial Co., or PCC, in May last year awarded its first export tender issued since the EU ban, followed by another one in August.
Since then, PCC and other exporters such as Kharg Petrochemical Co. and Iranian Gas Commercial Co. have regularly been shipping LPG to Asia mainly via direct negotiations, while National Iranian Oil Co. started exporting term cargoes since January 2014, sources said.
But in move seen as its attempt to test the market for better prices than the deep double-digit discounts that Iranian exporters had been selling to Chinese buyers, PCC last month issued another spot tender, offering a 45,000-mt mixed propane/butane cargo for late September loading.
The tender attracted no bids and was withdrawn, traders said, adding that it could have been placed back into the export program to China.
On top of the shipments to Asia, three smaller vessels -- the 5,000-mt White Pearl, 5,900-mt Black Pearl and 3,600-mt Liberty N -- also call at Assaluyeh three times a month to load a total of 50,000 mt for deliveries to Iraq under term deals, shipping sources said.
Iraq's State Oil Marketing Co., or SOMO, on Monday closed a term tender for a total of 445,500 mt of supplies for 2015 deliveries.
