En esta lista
Gas natural | Petróleo

Aramco accepts Oct loading term LPG nominations without cuts, delays: sources

GNL | LGN

Platts LP Gaswire

Aramco accepts Oct loading term LPG nominations without cuts, delays: sources

Lo más destacado

Japanese lifter asked to change Oct cargo ratio to more butane-rich

Mixed view on North Asian LPG inventory ahead of winters

Asia LPG prices on uptrend

Saudi Aramco has announced acceptances of October-loading term LPG cargo nominations without cuts and delays, traders told S&P Global Platts Sept. 17.

¿No está registrado?

Reciba alertas diarias y avisos para suscriptores por correo electrónico; personalice su experiencia.

Registro

However, Aramco was heard to have asked one major Japanese lifter to change the ratio of its October-lifting program to be more butane-rich, trade sources said. But this could not be immediately confirmed.

The request for the ratio change -- from the usual evenly-split propane-butane cargoes -- come as North Asia will soon enter its winter season, when more propane is needed for heating. "I think this would be hard as winter is coming," one trade source said.

Traders had mixed view on the LPG stock levels in North Asia. Some said that while inventory is high in South Korea, levels are low in Japan.

But one trader said there was plenty of inventory with Japanese importers. "At least in October, inventory level is enough," he said. "I think some of the Japanese importers have built up their inventory in September and October, so at a certain level, they are already prepared for the upcoming winter."

By July, Japan's LPG stocks rose 5.3% on the month to 1.374 million mt, recovering from a brief decline in June, as demand eased and imports recovered, according to Japan LP Gas Association, or LPGA, data.

Japan's import terminal running stocks rebounded by 64.2% on the month to 197,000 mt in July after a decline in June, with propane rising 57% on the month to 124,000 mt and butane jumping 78.1% on the month to 73,000 mt.

Latest LPGA data will be released by the end of the month.

The trader mentioned above said it would be difficult to assess the inventory balance and actual winter demand beyond October, as it depends on how severe the winters will be.

Meteorological agencies of Japan and South Korea have forecast higher-than-average temperatures for October.

Eyes on year-end North Asia weather

Japan's Meteorological Agency expects above-average temperatures from Sept. 18 through Oct. 17, while the Korea Meteorological Administration's one-month outlook on Sept. 16 forecast average- to above-average temperatures from end-September to mid-October.

Southern Japan is forecast to have a 70% probability of above-normal temperatures, with northern and eastern regions having probabilities of 50% and 60% of above-normal temperatures, respectively.

The trader said the forecast beyond October is awaited, though a slight shift to below-normal temperatures throughout South Korea from mid-October would raise concerns over demand and inventory.

Last month, Saudi Aramco's acceptances of term nominations for September-loading cargoes saw up to five Japanese and South Korean well getting cuts and delays, though Indian term buyers received nominated volumes.

Abu Dhabi National Oil Co., or ADNOC and Qatar Petroleum, or QP, have also announced acceptances of October-loading term LPG cargoes without cuts or delays, market sources said earlier.

The latest acceptances by Aramco, QP and ADNOC were in line with lifters' nominations as the OPEC+ alliance agreed Sept. 1 to raise collective crude production by 400,000 b/d in October, keeping to plans to continue easing their output cuts.

LPG market sentiment has been on an upswing in recent months. Saudi Aramco set both its September propane and butane term contract prices, or CPs, at $665/mt, the fourth consecutive monthly increase in the CPs and the highest since October 2014, Platts data showed.

Judging from the month-one October CP propane swaps, which was valued at $750/mt on Sept. 16 and indicated Sept. 17 at $757/mt -- with butane $8/mt below that -- the upcoming October term CPs look set for another increase.

CFR North Asia propane is also on an uptrend, with H2 October-delivery propane assessed Sept. 16 at $785.50/mt, the highest since October 2014, Platts data showed, amid strength of the natural gas market and low supply of propane globally as winter looms.

FOB Middle East differentials have also widened to a high single-digit premium in the week of Sept. 12, on traders bidding for end-October loading propane cargo in the Asia physical market.

With the October-November CP swap structure valued Sept. 16 at a $6/mt contango and indicated early Sept. 17 at a $3.50/mt contango, North Asian importers could still be persuaded to buy to make up for inventory shortfalls.

But November-December CP propane swap at a $5/mt backwardation makes it difficult for North Asian importers to justify purchases, sources said.