OREANDA-NEWS. July 17, 2012. Domestic LPG prices may rise further in the coming days as importers are likely to reduce supply in view of rising costs of imported products for August, ICIS C1 forecast.

LPG supply in the domestic market will probably drop if costs keep rising, since importers are expected to become less interested in selling their stockpiles.

Importers may also place fewer orders when costs are going up. Up till 10 July, Chinese importers have placed orders for only two cargoes of imported LPG for August, ICIS C1 shipping schedules indicated.

The costs of imported LPG with equal C3/C4 ratio were about yuan (CNY) 5,325/tonne on 9 July, for arrival in the first half of August, ICIS C1 assessment showed. The costs were up by around CNY675/tonne for July-arrival cargoes with the same ratio.

In addition to probably less supply, market sentiment also improved when costs were growing, market sources said. Some buyers stepped up purchases as they worried about more price hikes, after prices rebounded in some areas on 10 July.

Sinopec has asked its subsidiaries to push up LPG prices in view of climbing costs of imported LPG and relatively small production, said a refinery source with Sinopec. Most of the company's subsidiary producers in south and central China hiked LPG prices on 10 July.