Argus Far East Index™ (AFEI™)
Overview
Argus publishes daily key benchmark prices for delivery of large LPG (propane and butane) cargoes to east Asia (Japan, South Korea, China). The Argus Far East Index is the only price used for the settlement of swaps on major commodities exchanges for delivered LPG in east Asia.
The AFEI price is considered the global benchmark for pricing LPG and is the basis for other indexes, including the Argus Ningbo Index and the Argus West Africa Index.
Price assessment details
What are the advantages of the Argus Far East Index (AFEI) price assessments?
Asia-Pacific LPG trade has grown significantly over the past decade to meet the rise in demand resulting from numerous petrochemical facilities being built in the region. The Argus Far East Index is the preferred pricing tool for importers, traders and end-users in the region, with liquidity in the physical and paper markets rising significantly in recent years.
As the most liquid price assessment in the region, market participants benefit not only from the transparency that the index brings to LPG pricing but also the option to hedge against price fluctuations through exchange-listed swaps, which settle exclusively against the Argus Far East Index benchmark.
For instance, high volumes of AFEI swaps are traded as hedges with the Chinese Dalian Commodities Exchange’s LPG and petrochemical futures, helping Chinese market participants manage price risk.
The Argus Far East Index is also used to underpin contracts for sales of LPG in Asia-Pacific and liftings of LPG in many other parts of the world, including Canada, the Middle East, Australia and west Africa.
It is used as the basis for other calculated prices, such as the Argus Far East Index Mideast Gulf netback, which provides transparency for the price of LPG imported from the Middle East.
How are these assessments used?
The Argus Far East index benchmarks are used by all types of market participants including traders, risk managers, planners, analysts, finance officers, governments, regulators, tax authorities, producers, refiners and end-users such as petrochemical companies, as well as supply and purchasing managers for transactions related to:
- Long-term contracts: Annual/multi-year contracts for physical delivery based on the daily Argus Far East Index assessments
- Spot deals: For the delivery of individual LPG cargoes to east Asia and for liftings of cargoes in numerous locations around the world
- Risk management: As an invaluable tool for distributors, financial institutions and other participants to manage risk in long-term contracts
- Royalties and duties: The calculation of royalties and other taxes related to the production of LPG
- Analysis: For prospective and current investors and analysts to understand the value of LPG in Asia-Pacific and make informed decisions based on the assessments
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Key price assessments
Argus prices are recognised by the market as trusted and reliable indicators of the real market value. Explore some of our most widely used and relevant price assessments.
