Naphtha butane prices close to butane reduction

On Tuesday, CFR Japan's propane and butane prices rose by US$5/ton in the second half of September to the month of October, respectively, at US$677-683/tonne and US$695-700/tonne. The market talks mainly centered on the arrival of goods to the shore in October. A 22,000-ton equal-amount cargo that was landed in the first half of October was quoted at US$693/tonne or October CP premium water at US$33/tonne. A European trader’s delivery price of 22,000 tons of propane cargo or 22,000 tons of proportional cargo to the shore in the second half of October was US$670/ton. A Japanese importer intends to purchase a 22,000-tonne propane cargo to the shore in October at the price of US$20 per ton of CP water at the same price or the same quantity of equal-weight cargo. In addition, there is a willingness to purchase 22,000 tons of proportional goods at a slightly lower cost of US$30 per ton of CP in October. On the other hand, some Japanese importers seem to have sufficient supply to meet demand in October and thus retreat to the outside of the market. On the supply side, since the freight rate is at the mid-low limit of US$30/t, the seller’s quotation for 22,000-ton equal-proportion goods is expected to pass on the cost of freight in October as a result of the CP high water limit. Market participants expect the seller’s offer to fall to at least the US$30/ton limit for October CP.

Continuing the market dialogue on landed goods in November. A 22,000-tonne propane cargo that was landed in the first half of November was quoted based on the November Far-East Coast-to-shore index at a discount of US$2 per ton.

The open specification naphtha prices for the second half of October increased by US$5.5/t to US$694.75-695.25/t. As the prices of naphtha and butane are close, the willingness of Far East oil terminal buyers to purchase butane as a raw material instead of naphtha has subsided.

CFR China's propane and butane prices rose by US$5/ton in the second half of September to the first half of October, respectively, at US$677-683/tonne and US$695-700/tonne. China's 3-4 importers have spot demand in October. However, due to the lack of upward support from the domestic market, many importers waited and watched their emotions and did not start a clear dialogue. Based on the current *** exchange rate against the US dollar, market participants expect the domestic market price to be equivalent to $670-680/tonne. There were several spot shipments on the market in October. It was reported that the offer price of 22,000 tons of proportional goods was within the mid-to-low limit of US$30/tonne for CP in October.

For Southeast Asia, a Philippine importer expects that contracted goods will meet their demand and will not participate in the purchase of the on-shore spot in October.

The naphtha price is approximately the same as the butane price, but the demand for substitution of butane as a raw material is reduced. Crude oil boosted CP's rise in October, and the Far East's frozen cargo market followed up. However, the domestic market did not have sufficient upward support, and wait-and-see sentiment appeared to suppress market prices. In the afternoon, the market will focus on consolidation, with limited gains.