Singapore: Asian liquefied petroleum gas rose on lower stockpiles as demand for winter heating fuel gained. Propane for delivery to Japan added 1.1% to $900 a metric tonnes, including cost and freight. Butane climbed 0.6% to $910 a tonne.
Consumer inventories, which aren’t included in the official wholesale data, may be “much lower than normal” as consumers delayed purchases, said Ken Otto, senior vice president at industry consultant Purvin & Gertz Inc. “If winter weather turns out to be colder than expected, this could add a lot of strength to the market.”
Stockpiles of propane in the US, the largest LPG user, dropped 1.6mn barrels to 57.9mn barrels in the week ended December 14, Energy Department data showed. Inventories were 6.1mn barrels below the year-earlier level.
“The cold temperatures left behind following the winter storm that swept through the Midwest and Northeast last week continued to impact propane inventories,” the Department said in the report on Wednesday.
Saudi Aramco, the largest supplier of liquefied petroleum gas to Asia, sold a 44,000-tonnes cargo of propane to Chevron Corp at a record price of $880 a tonne, free-on-board. The cargo will load at Yanbu between January 1 and 10.
Imports by Japan, Asia’s largest buyer, rose 4.6% to 1.07mn tonnes in November, the Ministry of Finance said in a trade report released on Thursday.
Petrochemical Commercial Co, Iran’s state-run petroleum and petrochemical marketing company, plans to export as much as 24,000 tonnes for loading between January 1 and 2 at Assaluyeh.
Abu Dhabi Gas Liquefaction Co, operator of the Das Island gas liquefaction plants, offered 44,000 tonnes for loading between January 26 and 31 at Das Island.
Qatar International Petroleum Marketing Co, a state-owned petroleum marketing company known as Tasweeq, said it may have a 44,000-tonnes cargo comprising equal parts propane and butane for late-January shipment.
CPC Corp, Taiwan’s state refiner, bought 20,000 tonnes for delivery to Shen-Ao from Naftomar Shipping & Trading Co at a premium to Saudi Aramco’s January contract price.
The cargo, comprising 60% propane and 40% butane, will be delivered between January 25 and 31. The transaction followed an earlier purchase of a 20,000-tonnes cargo for delivery between January 10 and 18 to Shen-Ao.
Competition with refiners slowed imports into China, Asia’s biggest buyer after Japan and South Korea. Refiners are producing more LPG as they raise output of gasoline and diesel to ease the nation’s fuel shortage, said Phoebe Deng, a gas market analyst at Guangdong Oil and Gas Association.
Prices of imported LPG in China’s southeastern province of Guangdong was little changed at 7,550 yuan ($1,024) a ton on an ex-tank basis, Deng said. Refinery gas meanwhile slumped to about 6,050 yuan from 6,650 a ton a week earlier.
“The situation is likely to continue,” Deng said by telephone on Friday. “Some importers have indicated that they may halt imports and turn to local refiners for supplies.” – Bloomberg