LPG prices rose around Yuan 300/mt ($47.27/mt), or 8%-9% in both East and South China this week amid a combination of higher import costs and limited supply, market sources in the two regions said Friday.
Saudi Aramco set its November contract price for propane at $395/mt, up $35/mt from its October CP, and butane at $435/mt, up $70/mt.
The November CPs are about $10-$30/mt higher than earlier expectations. This is the second time in a row prices have been raised after four straight months of declines, Platts reported.
The higher CPS are expected to push up import costs for November-delivery cargoes to around Yuan 3,500/mt ($551.54/mt) on a CFR China basis after adding freight, taxes and fees, up around Yuan 300/mt from November, Platts calculations showed.
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The expected higher import costs led to a rise in LPG wholesale prices in the domestic market this week, traders said.
In South China, imported LPG cargoes of mixed propane and butane were heard to have traded at Yuan 3,600-3,700/mt in the wholesale market Friday, up Yuan 300/mt or 9% from Yuan 3,300-3,400/mt a week earlier.
Domestically produced LPG was said to have traded at Yuan 3,500-3,600/mt, also up Yuan 300/mt from a week ago.
“Higher November import costs and limited supply helped push up LPG wholesale prices in the region this week,” a local trader said.
Only three refrigerated LPG cargoes, totaling around 66,000 mt, arrived in South China’s Guangdong province over the past week, sharply lower from the from around the 175,000 mt seen in the previous week, according to shipping data from Beijing-based energy information provider JYD Commodities Hub. LPG supply from west Guangdong remained limited as Sinopec Zhanjiang Dongxing were still undergoing scheduled turnaround and had no supply for the market, local traders noted.
Buying activity was good in South China earlier this week, but traders expected prices to soften in the near term.
“Some LPG sellers started lowering their offers Friday due to thin buying interest and the trend is expected to extend into the coming weekend or earlier next week,” another local trader said.
PRICE ALSO MOVES UP IN EAST CHINA
In East China, imported and domestically produced LPG prices moved up this week due to higher November LPG import costs and limited supply.
Imported LPG cargoes of mixed propane and butane were heard traded at Yuan 3,800-3,900/mt in the wholesale market Friday, up around Yuan 300/mt or 8% from Yuan 3,500-3,600/mt a week ago, traders said.
Domestically produced LPG was heard to have traded at Yuan 3,800-3,900/mt in the wholesale market this week, up Yuan 300/mt from a week earlier.
LPG import terminals and refineries raised prices this week in line with higher November CPs, traders said.
Sinopec’s 14 million mt/year Yangzi and 13 million mt/year Gaoqiao refineries were still undergoing partial maintenance which also supported the higher prices in the region this week, traders added.
