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Gas Market Report
(Lloyds List Via Thomson Dialog NewsEdge)NORTH WEST EUROPE: BPAP March for propane was set at $495 which was lower than the market was expecting after the recent rally on the large propane numbers. The rise in prices was on the back of people trying to cover shorts for the period 1-10 March and where at one point willing to pay in the $540s. However, even this number could not draw the sellers for the required dates. There are now several large cargoes being offered to the market and with cargoes now arriving into peoples systems then most players now see the numbers for the 20 kt cargoes in the $500-510 range but buyers are staying away from the market with the exception of one cargo that was sold on p and c terms for 7-10 delivery.
Butane BPAP was set at $490 for March. The butane market has not been traded at all recently with sellers happy to just move tons into contract home within and outside of NWE and buyers happy just to live with their contract deliveries. The odd handy cargo has found its way into the petchems but always on a p and c basis.
The propane coaster market has got tighter over the last few days. Prompt tons are very hard to find and with the market so volatile on the screen, players are reluctant to trade too much in advance.
Furthermore, the market is backwardated so players are delaying their requirements as much as possible. The fob level is talked in the $530-540 range while the cif level is talked in the $560-570.
Activity on the coaster butane market is starting to increase. This is mainly due to more spot product becoming available as refineries begin to phase out of winter grade gasoline. Not surprisingly petchems are viewed as the main outlet for these refinery cargoes and at current naphtha levels workable cif butane prices into petchems are perceived to be in the high $490s-$510 range. Spot freight is still quite tight and as such fob numbers are probably somewhere in the $460s.
MEDITERRANEAN: Refrigerated cargo: Sonatrach set their posted prices for March at $497 for the propane and $505 for the butane, a $100 decrease on each grade which will certainly hurt end receivers who would have had some length at the end of Feb.
Large cargoes activity quite slim with the region reasonably supplied via contractual deliveries + spot arrivals recently concluded. Extra demand is limited and prices have come off in line with cif ARA falls. Premiums over NWE no longer exist anymore with some potential buyers even have a discount in mind.
Coasters: Propane trades have been quite thin this week although temperatures are below seasonal norms and no spot demand for fob'fca deals have been reported. However prices were declining this week by $30 following swaps and crude falls and were assessed in the $580s. Since the release of Sonatrach prices buyers are in a standby mode expecting prices to continue to fall. It was rumoured that the Moroccans bought a very prompt Spanish 1600 tonnes to replace an Algerian delivery delayed at Arzew by bad weather and congestion.
Butane activity has been quite similar to last week with only a few cargoes shipped ex refineries at contractual or floating prices for East Med and North Africa. The fob price weakened by $25 in line with Naphtha and NWE level and player's sentiment remain bearish. It heard that the Moroccans have bought less spot cargoes as should shortly discharge a large refrigerated cargo in Mohammedia and just issued their monthly tender for the delivery of 20'25 kt cif Mohammedia March 24 'April 10 in 4.2 to 6 kt pressurised lots .
ARABIAN GULF: The Saudis posted March CP at $530 for both propane and butane. Market generally felt the prices were still on the high side even after the huge $92 and $97 drop was seen in view of the depressed prices on the physical market. The Saudis to date have been reported to have sold seven cargoes (one to European major, three to western traders, two to Japanese shoshas and one to Korean importer) for March loading at April CP from flat to a premium of $5 per tonne. Could these purchases'sales at April CP be good ? In this market one would think so but who can tell?
FAR EAST: Crude oil prices initially fell from $62 per barrel to below $61 per barrel after US reported buildup in inventories but jumped back to the $62 per barrel level after a thwarted attempt to bomb the Saudis Abqaiq oil processing installation. Concerns about the production cuts in Nigeria and possible cuts by Iran and OPEC also boosted prices.
A Chinese importer bought 10 + 10 from a western trader at March CP plus 22 for mid March delivery China. Another Chinese importer was reported to have bought 10 + 10 from a western trader at April CP plus 38-39 for first half April delivery China. A western trader was heard to have sold 5 + 5 to a Chinese importer at $540 per tonne (including 5 days laytime) for end March delivery China.
A Japanese shosha bought 22 c3 from a European major at $538 per tonne for first half April delivery Japan under the Openspecs LPG contract. A Japanese importer was heard to have bought 22 c3 from a western trader at combination of $537-539 per tonne and April CP related for end March delivery Japan.
A Taiwanese refiner cancelled its tender too buy 11 + 11 for March 27 to April 13 delivery Taiwan due to high prices offered in the tender. Elsewhere, a European major issued a tender to sell 11 + 11 for first half April delivery Singapore to Japan range. Paper CP swaps prices for April slipped from $500 per tonne done last week to $495 per tonne this week as sentiments continued to remain weak. The March Argus Fareast Index paper swaps fell to $512 per tonne this week from $537 per tonne done last week reflecting the bearish market tone.
MT BELVIEU: Mt Belvieu prices as at 2 March 2006: propane 0.9000-0.9050$ per gallon; natural butane 1.1000-1.1050$ per gallon; iso butane 1.2200-1.2250$ per gallon; natural gasoline 1.3475-1.3525$ per gallon; ethane propane mix 0.4875-0.4925$ per gallon; ethane 0.5025-0.5075$ per gallon.
SHIPPING MARKET: Comments: The product prices have dropped and Saudi has reduced its CP with close to $100'tonnes from Feb CP to March CP. Prior to this Saudi sold 4 cargoes for March loading at April CP. The freight rates were pushed down last week and remain in the very low $40'tonnes. The rate is expected to remain at this level for some time. Other segments such ad LGC and MGC are still enjoying high rates due to large influence from the NH3 market.
PERIOD FIXTURES:
Gas Courchevel, 4,100 cu m, 6 months T'C, del Me, Mar 06 private terms, IPCG
Happy Bride, 6,300 cu m, about 5 days F'S off Stanlow, 4'6 Mar, hire not reported, Stasco
LPG FIXTURES:
Moonson, 3,200 cu m 800 tonnes LPG, Tees'Antwerp, 4'6 Mar, rate not reported, ConocoPhillips
Happy Falcon, 3,750 cu m, 2,000 tonnes LPG, Tees'Pembroke, 4'6 Mar, rate not reported, Chevron
Berceo, 4,100 cu m, 1,800 tonnes butane, Stanlow'options NW Europe, 4'6 Mar, rate not reported, Stasco
Gerda Kosan, 4,300 cu m, 2,000 tonnes LPG, Fawley 'Portugal, 8'10Mar, rate not reported, Stasco
Tanja Kosan, 6,300 cu m, up to F'C butane, La Corunna'Dakar, 1'3 Mar, rate not reported, Ryttsa
Tilda Kosan , 6,300 cu m, 3,500 tonnes LPG, Wilhelmshaven'options NW Europe, 6'8 Mar, rate not reported, ConocoPhillips
Newmarket, 6,300 cu m, 3,500 tonnes LPG Flushing'B'Ambes, 4'6 Mar, rate not reported, Petredec
Newmarket, 6,300 cu m, 3,500 tonnes LPG Fawley'Tees, end Feb, rate not reported, ExxonMobil
Moritz Schulte , 8,200 cu m, 3,700 tonnes LPG, Immingham'Tees, 4'6 Mar, rate not reported, Huntsmann
Aintre, 6,500 cu m, 3,700 tonnes butane, NW Europe'Nouakchott, 5'10 Mar, rate not reported, Vitol
Stafford, 15,000 cu m, 8,600 tonnes butane, Fawley'options NW Europe, 5'7 Mar, rate not reported, ExxonMobil
Maersk Humber, 20,700 cu m, 12,500 tonnes LPG, Algeria 'Yarimca, 6'9 Mar rate not reported, Geogas
PETCHEM FIXTURES:
Gaschem Ben Flor, 7,900 cu m, 4,500 tonnes PPL, Aratu'Europe, 16'18 March, rate not reported, Braskem
Gaschem Batic, 8,600 cu m, 5,000 tonnes ethane, Houston'Europe, early April, l'mid $210s per tonne, Mitsusbishi
Sigloo Moss os , 10,500 cu m, minimum 4,000 tonnes BTD, Flushing'SE Asia or Far East, early April, low $400s per tonne basis SE Asia, undisclosed charterer
NH3 FIXTURES'CPP:
Hebris , 24,000 cu m, 12,000 tonnes nh3, BIK'India, early March, rate not reported, Reliance
SALE AND PURCHASE'NBs:
Hermann Schulte , 5,670 cu m, semi-refrigerated, built 1980 and Dorothea Schulte, 5,670 cu m, semi-refrigerated, built 1981, reported sold to MC, about $11m en bloc, min 1 year time charter back to B Schulte.
Solvang : 1 opt 1, 75,000 cu m, fully-refrigerated, HHI, Korea, fourth quarter 2008, around $90m
Richard Neu: 1 opt 1, 75.000 cu m, fully-refrigerated, HHI, Korea, fourth quarter 2008, around $90m
The report may not be reproduced in part or as a whole without permission. While information is presented in good faith, Fearnleys cannot accept liability for any errors of fact or opinion or for any loss incurred by any person who may seek to rely on the information contained herein.
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