October Pricing Analysis - Asia & Middle East Light Ends

Summary

In October, gasoline and the petrochemical feedstocks diverged clearly. While gasoline Singapore 92 RON fell through the month and closed at its monthly low, naphtha and propane prices rallied to monthly highs on the final trading session (30-Oct). The gasoline crack vs Dubai crude narrowed sharply, with gasoline prices falling as supply concerns eased through the month. A key reason was that China, one of Asia’s top gasoline exporters, issued a fourth batch of fuel export quotas for gasoline and other fuels. This additional supply came even as there was a build-up in storage inventories in key trading hubs such as Singapore – its government data showed that light distillate inventories rose to a two-week high of 11.304 million barrels in the week to October 28. It was a different scenario for LPG and naphtha. Escalating risks in the Strait of Hormuz continued to choke the availability of Middle East supply for both products – STS activity saw dwindling movement as the month wore on. October saw at least 27 commercial ship attacks, the highest number since the war between Iran and the U.S. began in late February. Buyers for naphtha were even more anxious to secure Middle East supply, a factor that contributed to KPC signing its first-ever DES term deal for Dec 2026–Nov 2027 on October 29. As for LPG, the propane CFR Japan price rallied 22.8% from $905.50/MT to a $1,112.25/MT monthly high (30-Oct) and averaged $978.33/MT, an increase of 103.8% year-on-year. Given the high prices that spot LPG cargoes have been trading through the month, few market watchers were surprised when the November Aramco CP was announced on 29-Oct with propane at $720/MT and butane at $780/MT, up $40 and $50 from the October CP. The November CP was the highest since May this year, when propane spiked to $760/MT and butane at $820/MT due to supply restrictions from the Middle East.

Market activity

Gasoline

• OQ Trading Limited bought the most of the Mogas 92 (100kb) FOB Straits cargoes, taking 5 of the 11 outright trades done over the month. Vitol Asia bought 3, and Gunvor Singapore, PetroChina International and Union International Trading bought 1 each. Aramco Trading Singapore sold 5, while Trafigura, Reliance Global Energy Services, PTT International Trading, BP Singapore, Glencore Singapore and SK Energy International sold one cargo each.
• Trade prices trended lower as the month wore on - $153.80/bbl (1-Oct), $144.80/bbl (9-Oct), a $129.20/bbl low (16-Oct) and a last trade of $136.00/bbl (29-Oct), when OQ Trading bought from SK Energy International. No outright trade cleared on 30-Oct, with the trading session’s lowest offer untaken at $126.10/bbl.
• Window activity was geared heavily towards buyers (34 bids versus 7 offers), with OQ Trading (10), Vitol Asia (7) and Gunvor Singapore (7) the most active bidders. Offers were visible only on 1, 2 and 9-Oct and again on 29 and 30-Oct, from Aramco Trading Singapore (3), SK Energy International (3) and Unipec Singapore (1).

Naphtha

• Physical liquidity thinned in the second half of the month – four cargoes were traded by 13-Oct and just one spread trade done on 29-Oct. ADNOC Global Trading Asia was the seller in all the trades while BP Singapore bought three of the four cargoes ($920/MT on 5-Oct, $979/MT on 9-Oct and $988/MT on 13-Oct), Trafigura bought one ($924/MT on 6-Oct) and TotalEnergies Trading Asia bought the spread trade.
• In terms of offers, ADNOC Global Trading Asia placed 20 of the 21 offers in the first half of the month, but did not offer after 15-Oct. Bids kept climbing without outright offers, reaching $1,082/MT on 27 and 30-Oct (TotalEnergies Trading Asia), above the $1,080.00/MT index on 30-Oct.
• Buyers far outweighed sellers during the month, with 163 bids versus 21 offers. TotalEnergies Trading Asia (50), BP Singapore (35), ADNOC Global Trading Asia (33) and Vitol Asia (23) were the most active bidders.

LPG

• Window activity for Far East propane cargoes (mostly CFR Japan) logged 56 bids and 23 offers, resulting in 11 trades (ten 23KT half cargoes and one 46KT full cargo) against 6 in September.
• PCSG (9), Trafigura (7), Vitol (6) and SwissChemGas (6) were the most active bidders. BP led the offers (6), ahead of BASF, Satellite International, Oriental Energy and SCHE (3 each).
• BP bought a 23KT 1H November cargo from Swisschem at Nov FE +$52/MT (6-Oct). Second-half November half cargoes then traded at Nov FE +$39/MT (AB Commodities from BWPS) and +$40/MT (BB Energy Asia from SKGI) on 7-Oct, +$38/MT (Unipec from Trafigura, 9-Oct), +$34/MT (SCHE from Trafigura, 14-Oct) and +$20/MT (Trafigura from BP, 27-Oct), so November-loading premiums compressed through the month.
• Trafigura's unsuccessful bids for 46KT propane cargoes basis STS Vadinar (10-11 Nov loading) rose from $770/MT (22-Oct) to $820/MT (26-Oct), $900/MT (27-Oct) and $910/MT (28-Oct), showcasing the limited supply of Middle East cargoes for STS loading.

Price action

• Gasoline Singapore 92 RON: Full-month avg $139.33/bbl (+2.2% MoM, +80.7% YoY), -16.7% open-to-close ($151.93 to $126.63/bbl). Monthly high $151.93/bbl (1-Oct), low $126.63/bbl (30-Oct).

• Naphtha Japan CFR: Full-month avg $991.20/MT (+9.7% MoM, +74.1% YoY), +19.0% open-to-close ($907.63 to $1,080.00/MT). Monthly high $1,080.00/MT (30-Oct), low $907.38/MT (2-Oct).
• The crack vs Dubai crude stayed negative through 8-Oct (low -$7.02/bbl on 5-Oct), turned positive on 9-Oct (+$0.59/bbl), peaked at +$4.69/bbl (19-Oct), dipped negative on 22 and 23-Oct and closed the month at +$2.65/bbl (30-Oct). The monthly average of +$0.64/bbl compared with -$12.12/bbl in September.

• Propane FE CFR: Full-month avg $978.33/MT (+11.4% MoM, +103.8% YoY), +22.8% open-to-close ($905.50 to $1,112.25/MT). Monthly high $1,112.25/MT (30-Oct), low $905.50/MT (1-Oct).
• The rally was concentrated at month-end: Propane FE CFR gained $173.25/MT between 21 and 30-Oct, including $71.00/MT on the final session, after weekly gains of 3.5% in W2 and W3 and a 0.8% dip in W4.

• The Middle East CP Propane Cargoes Index averaged $725.49/MT (+5.5% MoM) and the Butane Cargoes Index $776.22/MT (+6.9% MoM), trailing the +11.4% gain in the Propane FE CFR average. Both ended the month below their open ($692.25/MT for propane, -2.5%; $744.25/MT for butane, -1.4%).
• Saudi Aramco set the November propane CP at $720/MT, $13.24/MT above the November CP swap average which stood at $706.76/MT as of 29-Oct.

Cross-market dynamics

• Gasoline 92 RON crack vs Dubai: opened $44.74/bbl (1-Oct), fell to $17.65/bbl (22-Oct) and closed at a monthly low of $7.93/bbl (30-Oct), a $36.81/bbl compression. The monthly average of $28.60/bbl was 26.1% above September's $22.68/bbl. Gasoline's own $25.30/bbl decline accounted for 68.7% of the compression and a firmer Dubai leg (implied at $107.20/bbl rising to $118.70/bbl, calculated as outright less crack) for the remaining 31.3%.
• Naphtha Japan CFR crack vs Dubai: opened -$5.22/bbl (1-Oct), turned positive from 9-Oct and closed at +$2.65/bbl (30-Oct). Naphtha gained $19.37/bbl against $11.51/bbl for the implied Dubai leg, so naphtha outpaced crude over the month.
• Propane FE CFR vs Naphtha Japan CFR: the discount narrowed to -$12.88/MT on average from -$25.17/MT in September. The spread ranged from a -$26.13/MT discount (5-Oct) to a +$55.88/MT premium (21-Oct), the only session beyond the +$50/MT level, putting the feedstock out of reach for Asian crackers, but closed at a -$32.25/MT discount (30-Oct) during the final session.
• Middle East CP Propane/Butane swaps spread (CP C3/C4): widened to -$50.73/MT on average from -$38.55/MT in September, moving from -$45.00/MT (1-Oct) to a -$57.00/MT low (27 and 28-Oct) and closing at -$52.00/MT (30-Oct) on the December contract after the 29-Oct roll. Butane values remain elevated amid a shortage caused by disruption to flows from the Middle East.

Cross-regional dynamics

• Gasoline E/W spread (Platts Singapore 92 RON swaps versus Eurobob NWE swaps, Month 1 contract): moved from -$4.64/bbl (1-Oct) to -$1.57/bbl (30-Oct), with a monthly average of -$2.45/bbl against -$8.30/bbl in September.
• Propane NWE CIF swaps vs Propane Far East CFR: NWE's discount to delivered Far East narrowed on average to -$204.66/MT from -$231.33/MT in September. The spread ranged from -$251.50/MT (27-Oct) to -$176.50/MT (21-Oct) and ended at -$225.50/MT (30-Oct).
• Propane FE CFR vs Middle East CP swaps spread widened from $193.50/MT (1-Oct) to $364.75/MT (30-Oct), a monthly high on the final session and above September's $246.00/MT high, with a monthly average of $234.31/MT against $184.01/MT in September.
• LPG Freight: US Gulf-Chiba freight (BLPG3) averaged $325.84/MT (+7.3% MoM), peaking at $346.71/MT (7-Oct), easing to $297.86/MT (21-Oct) and ending at $313.14/MT (29-Oct). Middle East Gulf-East freight (BLPG1) averaged $257.42/MT (+10.1% MoM), rising from $245.20/MT (1-Oct) to $265.00/MT (8-Oct) and ending at $257.20/MT (29-Oct).

Curve structure

• Gasoline SG 92 RON Swaps - front collapse and back repricing. M1 eased $2.90/bbl while M2 gained $5.68/bbl, M6 $11.06/bbl and M12 $7.26/bbl, narrowing the front backwardation.

• Naphtha Japan CFR Swaps – backwardation steepened. M1 gained $162.00/MT against $74.65/MT for M12, widening the backwardation along the curve.

• Propane FE CFR Swaps – Backwardation steepened sharply. M1 gained $248.50/MT against $82.92/MT for M12. The FE propane timespread (M0/M1) opened at $42.00/MT (1-Oct), peaked at $48.00/MT (5-Oct), fell to $15.00/MT (20-Oct) and closed at $19.00/MT (30-Oct).

Price volatility

• Naphtha and propane volatility rose from September's six-month lows (3.93% and 3.72%) to 4.96% and 5.05%, their highest since July, as both rallied in the final week, with 30-Oct delivering gains of $30.25/MT for naphtha and $71.00/MT for propane.
• Gasoline volatility eased to 4.97% from 6.13% in September as the decline built progressively through the first three weeks, with the largest daily fall (-$9.14/bbl) not arriving until 30-Oct.

Something to watch

• Propane premium over naphtha: Propane FE CFR gained $71/MT on 30-Oct to $1,112.25/MT, moving to a $32.25/MT premium to Naphtha Japan CFR. Prices of propane above naphtha removes the incentive to switch feedstock to propane. In general, propane needs to trade at a discount of $50/MT or more to naphtha to incentivise feedstock switching. Monitor the propane-naphtha spread.
• Gasoline is currently amply supplied, with China’s additional exports and stocks piling up in Singapore and other hubs. However, given the ongoing war risks and with refineries globally already running at full tilt, sudden large refinery shutdowns could impact the market and spike prices again.
• Elevated freight costs and Middle East supply disruptions have tightened naphtha availability, driving Asian prices up. This has been tempered by numerous scheduled petrochemical plant turnarounds in South Korea, such as LG Chem and Korea Petrochemical Industries Co. How fast these plants restart after turnarounds, and whether high prices of feedstock such as naphtha spur more plant turnarounds should be monitored.