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Saudi Arabian term lifters recommend Nov propane CP at $835-$860/mt

Highlights

Recommends butane $20/mt below propane

Nov term CPs set for sixth straight monthly rise

Aramco may announce Nov CPs Oct 31

Term lifters of Saudi Aramco's LPG cargoes have recommended that the November contract prices be set between $835/mt and $860/mt and butane about $20/mt below that, putting them on track for the sixth consecutive monthly increase, traders said Oct. 26.

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One north Asian trader said the highest level should be around $850/mt.

"Heard [there are] many butane cargoes left in the market, so butane should be lower than propane," the trader added.

Aramco is expected to announce the November CPs by Oct. 31, traders said.

Month-one November propane CP swap was notionally indicated at $834/mt on Oct. 26, down from $844/mt valued the previous session. The November CP propane swaps averaged $851.47 between Oct. 1 and Oct. 25, S&P Global Platts data showed.

Aramco set the October propane CP at $800/mt, up $135/mt from the September CP, and the butane CP at $795/mt, up $130/mt above September, which were then the highest since July 2014 for the propane CP, when it was set at $820/mt, and since August 2014 for the butane CP, when it was at $800/mt, Platts data showed.

While November term CPs are set to keep their uptrend, November CP swaps have been easing from $875/mt valued Oct. 6, which were the highest since Feb. 26, 2014, when it touched $874/mt, Platts data showed, as Middle East supply is ample, with Aramco and ADNOC LNG each selling a spot cargo of mixed LPG for end-October and early-November loadings in recent weeks.

Qatar petroleum, ADNOC and Aramco have also announced acceptances of November term cargo nominations without cuts or delays, though Aramco has announced some advanced lifting dates.

Iran's LPG shipments were expected to reach around 440,000-450,000 mt in October compared with 556,000 mt exported in September, largely to Asia, and are expected to rebound in November to levels seen in September, provided there are no plant shutdowns, trade sources said.

North Asian demand for propane is expected to be healthy, with Chinese propane dehydrogenation plants having returned from maintenance and started seeking cargoes, and on concerns over an early winter even as LPG stocks in Japan are at the bottom of the five-year range.

Healthy demand had pushed up the front-cycle CFR North Asia first-half November-delivery propane to $910/mt Oct. 6, the highest since June 24, 2014, at $922/mt, before the new front-cycle second-half November delivery propane eased to $874.50/mt on Oct. 26, a two-week low, according to Platts data, as more offers were seen in the market to capitalize on firm prices.