Japan's Tepco steps up LPG procurement to meet summer power demand
来源： 发布日期：2016-08-13 22:24:12 发布者： 共阅1107次 字体：
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Japans Tepco Fuel & Power is stepping up LPG procurement for thermal power generation to meet peak summer power demand over July-August, sources familiar with the matter said this week.
Tepco Fuel & Power, a unit of Tokyo Electric Power Company Holdings, bought a few LPG cargoes in July, marking the first procurement of the fuel in fiscal 2016-2017 (April-March), sources said.
Traders said the utility was likely to have bought two to three cargoes of LPG for delivery in July, with a propane/butane mix of either 60:40 or 50:50.
For August, Tepco Fuel & Power had bought a half cargo of 21,000 mt of propane so far, a trader said.
This could not be confirmed with the company, however, and price details were not available.
It was unclear if the utility will buy any more cargoes for August.
The company also hiked its consumption of crude oil and fuel oil for thermal power generation in July as a result of higher summer temperatures, sources said.
"Tepco buys LPG during the summer because LPG prices [are] traditionally low during this time," a market source said.
The price of physical propane on a CFR Singapore-Japan basis fell to a record low of $271.50/mt on July 29, S&P Global Platts data showed.
This was the lowest level since October 2006, when Platts first started assessing propane prices.
The price has since rebounded slightly to be assessed at $282.50/mt Monday on the back of an uptick in the crude complex.
Despite demand from Japan for power generation, the LPG market is still largely bearish amid ample supply from the US and the Middle East, including an increase in exports from Iran.
Demand from petrochemical producers has been largely lackluster amid high inventories in North Asia and some steam cracker scheduled to carry out maintenance.
Tepco Fuel & Power typically uses fuel oil and LPG for thermal power generation to meet power demand during peak hours.
It typically makes prompt purchases of LPG from domestic suppliers when demand for power generation rises.
Its increased LPG buying follows a spike in fuel oil demand for thermal power generation, which surged by 22% from a year ago to 670,000 kiloliters (135,941 b/d) in July mainly due to the hot weather and glitches at coal- and gas-fired power plants, as estimated by Japans largest refiner JX Nippon Oil & Energy.
A trader said earlier that Japans fuel oil demand in July was three times more than what was expected for the month.
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