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'Almost' perfect storm hits LPG prices

  • : LPG
  • 21/09/28

An "almost" perfect storm of factors in Europe is behind the supply squeeze that has seen LPG prices move to multi-year highs, Argus' vice president LPG, David Appleton, told delegates at Liquid Gas Europe's European LPG Congress today.

Propane prices cif Amsterdam-Rotterdam-Antwerp (ARA) have gained around $250/t since 1 June to $778/t yesterday, and butane prices are up by around $240/t over the same time at $753/t, each marking the highest since 2014.

Appleton said the squeeze is a result of a combination of supply issues. Low US stock levels are limiting exports just as European buyers are looking to rebuild inventory, and any product that does leave the US is finding more attractive netbacks in Asia-Pacific. Nearer to home, low European refining rates are capping supply and this is compounded by Algerian supply disruption and ongoing steady reductions from Russia.

Appleton said he applied the "almost" caveat because the situation could soon be tempered.

"September is not February", he said. With the northern hemisphere not yet in peak heating season, much of the current upside price pressure is due to demand for stock-building, and the resultant inventories may prove sufficient as winter unfolds. This would see current prices mark a peak for this winter, given that hey largely reflect demand that has been brought forward.

Appleton said stocks are low now because of very strong demand for heating "in all three key regions" — north America, Europe and Asia-Pacific — last winter. And this has no bearing on how conditions may unfold this year, he said.

Lastly, and crucially, "consumers who swing between propane and naphtha are simply not in the market at all" as buyers, said Appleton. A lack of this discretionary buying could see prices sharply tail off if the current sole prop on the buy-side — heating demand, or heating stock-building demand — subsides.

Pivoting to a forward view, Argus' LPG consultancy principal Kristen Mueller painted a fairly bullish outlook for demand, albeit it with some downside risks highlighted.

Mueller expects demand recovery as the pressure of Covid-19 on transport and commercial markets subsides next year. Flexible petrochemical demand will return as Mueller forecasts naphtha to return to its historically-predominant premium to rival feedstock propane. Over 2022 and 2023 demand patterns will return to "a world that looks a little bit nearer to 2019," she said.

Mueller highlighted a swathe of capacity additions from new propane dehydrogenation (PDH) facilities. China provides the bulk, with seven new PDH plants due to come online in that country this year, eight next year, and nine in 2023, giving an estimated 16.2mn t/yr of additional demand. For comparison, overall European LPG demand from all sectors is forecast by Argus at around 40.25mn t this year.

With so much new forecast demand pegged on PDH plants, propane is increasingly reliant on propylene markets. Mueller highlighted that at current PDH capacity, just a 10pc drop in Chinese operating rates can instantly take 1 mn t/yr out of global LPG demand. With PDH capacity set to double on the new sites by 2023, the effect of any reduction in operating rates is going to lead to larger and larger impacts on global balances.

On the supply side, Mueller said major LPG producing regions — north America and the Middle East — will significantly, and steadily, increase output in the next five years.


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25/01/22

Syria issues first post-Assad oil tenders

Syria issues first post-Assad oil tenders

Dubai, 22 January (Argus) — The new administration in Syria has issued its first tenders to buy crude and refined products since the fall of Bashar al-Assad's regime in December, as acute fuel shortages continue to cause lengthy blackouts in the country. Tenders seeking 3mn bl of light crude for the 140,000 Banias refinery and 1.2mn bl of heavy crude for the 110,100 b/d Homs refinery close for bidding on 27 January. They have a 10pc flexibility either way on the volumes. The Banias refinery is undergoing maintenance at several of its production units after being taken offline last month because of a lack of crude feedstock. Syria's new administration has also issued its first import tender for refined products — 80,000t of 90 Ron gasoline, 100,000t of 10ppm sulphur gasoil and 100,000t of fuel oil — commencing as soon as possible for delivery over a 30-day period. Offers must be delivered by hand to the oil ministry in Damascus by 14:30 local time on 27 January. A tender seeking 66,000t of LPG has been issued as well. A previous tender for 20,000t of LPG was awarded at mid-teen $/t premiums to fob Lavera west Mediterranean prices. Before Assad was toppled, Syria relied heavily on Iran for its oil supplies, as international sanctions imposed in the wake of the 2011 civil war left the country critically short of feedstock for its refineries. Iran's crude exports to Syria averaged around 55,000 b/d in January-November 2024 and around 80,000 b/d in 2023, according to trade analytics firm Kpler. Iran was also sending around 10,000-20,000 b/d of oil products to Syria in recent years, according to consultancy FGE. But Tehran has halted crude deliveries to Syria since the Islamist group Hayat Tahrir al-Sham took control last month , leaving the new transitional government under pressure to find alternative suppliers. Government-to-government deals are a potential option. "Recent political developments have indicated that Qatar, Saudi Arabia and Turkey could play a role in solving Syria's crude and refined products shortage," FGE analyst Palash Jain said. Saudi Arabia is willing to help for a limited period, but discussions remain in a preliminary phase and are light on details, a source with knowledge of the matter told Argus . Riyadh is waiting to hear more from the Syrians on their energy needs and requirements, the source added. The latest tenders come just two weeks after the US waived sanctions that had previously prohibited energy trade with Syria. The waiver, issued on 6 January, is valid until 7 July. By Rithika Krishna and Bachar Halabi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Texas, Louisiana ports closed by winter storm: Update


25/01/21
25/01/21

Texas, Louisiana ports closed by winter storm: Update

Updates status of operations at Port Houston facilities. Houston, 21 January (Argus) — Ports in Texas and Louisiana remained closed to shipping traffic Tuesday afternoon due to a winter storm, a shipping agent said. Marine pilots suspended boardings at the Texas ports of Houston, Galveston, Texas City and Freeport late on 20 January. Traffic also was halted at the Sabine-Neches Waterway on the Texas-Louisiana border, which offers access to terminals and refineries in Port Arthur and Beaumont, Texas, as well as Cheniere's Sabine Pass liquefied natural gas terminal. Pilots also halted traffic at the Louisiana port of Lake Charles late on 20 January. Port Houston facilities, which include eight public terminals on the Houston Ship Channel, will remain closed through Wednesday, according to statement from port officials. Vessel operations may resume at container terminals on Wednesday evening, the statement said. By Tray Swanson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Asian LPG market braces for Trump tariff war


25/01/21
25/01/21

Asian LPG market braces for Trump tariff war

China's reliance on US exports of LPG could be under threat if significant trade tariffs are introduced, write Frances Goh and Eunice Ng Singapore, 21 January (Argus) — Concerns are mounting on the Asia-Pacific LPG market following the inauguration of US president Donald Trump on 20 January as participants wait to see whether he follows through on a promise to impose a 60pc import tariff on Chinese goods. Trump is expected to use trade tariffs as a tool to reinvigorate domestic industrialisation while cutting trade deficits, but to what extent and when is still uncertain. The other uncertainty is how swift and severe Beijing's retaliation will be if significant tariffs on imports of Chinese goods are introduced. The concern then for the Asian LPG market is whether LPG is ensnarled given China's growing dependence on US exports of propane and butane — and increasingly ethane — for its still-expanding petrochemical sector. A surge in propane feedstock costs for Chinese propylene producers at propane dehydrogenation (PDH) plants in particular could drive up downstream petrochemical prices. Price movements in Chinese domestic polypropylene (PP) futures are closely aligned with delivered propane prices in Asia under the Argus Far East Index. Any significant hike in propane import prices would subsequently drive PP prices higher and potentially curb demand, squeezing PDH margins and potentially leading to rationalisation in an already struggling sector. Yet Shandong Port's surprise decision to ban Iranian-linked vessels sanctioned by the US earlier this month has been widely viewed as an attempt at appeasement, following on from Washington's strengthening sanction enforcement from the third quarter of last year. The news has caused consternation among market participants bearing in mind 1mn t of the 8.5mn t of LPG that discharged from VLGCs at Shandong, in south China, are thought to have come from Iran, according to Kpler data. Washington added more than 130 vessels to the sanctions list last year, which comprises a total of nine VLGCs, according to shipbroker Fearnleys. Yet Beijing dismissed suggestions it was making concessions to the US. "China stands firmly against the US' illegal unilateral sanctions and long-arm jurisdiction that have no basis in international law or authorisation by the UN Security Council," China's foreign ministry spokesperson, Guo Jiakun, said after the Shandong Port ban was announced. Most Asian LPG market participants think Beijing will respond aggressively to US tariffs, with reprisals capturing US propane and butane. But many believe Beijing's waivers on tariffs introduced in 2020 will remain in place because of China's dependence on US LPG and the country's current economic malaise. Hurt locker The five main US goods imported to China in terms of value in January-November 2024 were electronic integrated circuits at $10.7bn, followed closely by LPG at $10.5bn — $10.1bn for propane and $390mn for butane — and then by soybeans, motor vehicles and jet turbines at $10.1bn, $6.8bn and $6.3bn, respectively, customs data show. The importance of US LPG has made many Chinese importers concerned that it will make Beijing target the product to hurt US export revenue at the cost of impacting its domestic petrochemical sector. China's total LPG imports increased by 11pc to 34.5mn t last year from 31.1mn t in 2023, and by 89pc from 18.2mn t in 2017, Kpler data show. Of this, 17.8mn t came from the US, while 14.4mn t came from the Middle East — the former climbing and latter declining significantly on the year. The expectation is for a resumed trade war to drive up feedstock costs for PDH operators already struggling with weak margins. China will want to prop up the sector to prevent the economic consequences from plant closures. But the rapid growth of steam cracking capacity and the launch of crude-to-olefins mega-refineries might ease concerns for the government, even giving it the opportunity to reduce its reliance on US propane. Chinese imports of US goods by value $bn Electronic integrated circuits 10.68 LPG 10.46 Propane 10.07 Butane 0.39 Soya beans 10.07 Motor vehicles 6.75 Turbojets, turbopropellers and gas turbines 6.27 Crude 5.49 Aircraft and spacecraft 4.76 Semiconductor manufacturing machines 4.08 Copper scrap 3.29 Blood 3.16 Medical instruments and equipment 2.66 LNG 2.38 — Customs Chinese imports of US LPG Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

S China LPG terminals face LNG, refinery competition


25/01/21
25/01/21

S China LPG terminals face LNG, refinery competition

The opening of several petrochemical units in the region will increase the number of LPG imports, putting added pressure on terminal operators London, 21 January (Argus) — South China's LPG import terminals that serve the residential and commercial sectors saw their intake decline last year as a result of increasing availability of lower-priced LNG and refinery LPG. This raised re-exports to clear inventories as well as spur rationalisation in the sector. And the pressure could mount in 2025 with imports due to grow as new LPG-fed petrochemical units open. South China is where most of the country's non-petrochemical sector use is concentrated. Imports of LPG to the region's wholesale terminals — which serve the regional market by delivering LPG to bottling plants before being distributed to residential and commercial retailers — dropped by 9pc to about 5.3mn t in 2024, data from Kpler show, as a result of LPG's heating market share losing ground to natural gas, supplies of which have been furnished by LNG imports. The wholesale terminals became less competitive last year partly owing to cheaper LNG arriving in the region as well as surging LPG production from refineries. Trucked LNG prices in Guangdong averaged 4,841 yuan/t ($672/t) in 2024, while the Pearl River Delta index for trucked LPG from terminals in the province's Guangzhou, Zhuhai and Shenzhen cities averaged Yn5,097/t in 2024. South China's LPG demand for heating fell by about 20-25pc last year, market participants say. This came as regional refineries increased LPG output by about 28pc to 8.88mn t in January-November, National Bureau of Statistics data show, which was linked to flagging sales of gasoline pushing plants to produce more LPG for integrated petrochemical production. The price of LPG truck cargoes from Guangzhou refinery in Guangdong averaged Yn5,006/t in 2024, with cheaper supply from two refineries leading to a twofold increase in bottling plants that bought from the facilities instead of import terminals. Terminal operators tried to tackle the challenge of cheaper competing LNG and refinery LPG supply by exploring overseas markets for lower-priced LPG and reducing trading operations. This was reflected in imports to the region from Iran rising by 12pc to 3.8mn t in 2024, raising Iran's share of the south Chinese import market by 13 percentage points to 70pc, Kpler data show. Iran's LPG was sold at heavy discounts compared with other Mideast Gulf suppliers owing to US sanctions on the country and vessels carrying its energy and petrochemical products. Warm squeeze Some of south China's larger terminals chose to re-export their LPG to ease inventory pressure, with shipments reaching a record high of 1.1mn t in 2024, up by 28pc from 2023. Butsmaller terminals had to cut imports as the heating market was squeezed, including facilities in Nansha and Raoping, Guangdong, where arrivals almost halved to 178,600t and 365,700t, respectively. Another option was divestment. Private-sector LPG and petrochemical firm Oriental Energy said in December that it agreed to sell 55pc of its Guangxi Tiansheng terminal to neighbouring Guangxi Haichuan Energy in Qinzhou. Oriental Energy has been actively selling its LPG assets recently, offloading its bottling plants in Guangxi that are downstream of the Tiansheng terminal, market participants say. These challenges for terminal operators are likely to persist this year as more LPG arrives in the region, which will welcome two new LPG import terminals in 2025 to meet feedstock demand for a 1.6mn t/yr ethylene cracker in Huizhou and a 1.2mn t/yr cracker in Zhanjiang. The latter terminal will sell excess LPG to the domestic wholesale market when it begins receiving cargoes, local traders say. Integrated refineries in south China are also expected to continue ramping up LPG production prior to opening their linked downstream petrochemical units over the coming two years. This include the Sinopec Maoming Petrochemical plant, which is due to bring a 1mn t/yr naphtha and LPG-fed cracker on line by 2027. Trucked LPG/LNG prices in Guangdong S China wholesale terminal imports S China LPG imports by origin, 2024 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump tariffs threaten Canadian NGL exports to US


25/01/21
25/01/21

Trump tariffs threaten Canadian NGL exports to US

A tariff on exports would see a significant cut to deliveries or a price drop in order to facilitate trade, writes Yulia Golub Calgary, 21 January (Argus) — Newly inaugurated US president Donald Trump has said he will impose 25pc import tariffs on goods from Canada from 1 February, which could potentially reduce shipments of the latter country's natural gas liquids (NGL) into the US or depress Canadian prices to a level that ensures flows continue. Trump in November announced plans to impose tariffs on the US' northerly neighbour for an indefinite duration, citing inadequate border controls and the US' trade deficit with Canada. Ottawa in response pledged to spend more on border security. Alberta, home to most of Canada's upstream oil and gas production, had expected the tariff to be introduced on the day of Trump's inauguration on 20 January. "Alberta is pleased to see that President Donald Trump has decided to refrain from imposing tariffs on Canadian goods at this time as they study the issue further," Alberta premier Danielle Smith said on 20 January. A 25pc tariff on Canadian propane and butane exports to the US would cut deliveries as suppliers look to the domestic market to sell, market participants say. Relief for Canadian producers is unlikely to come from increasing exports to northeast Asia from the Pacific coast given the country's terminals are operating at capacity. The other likelihood is that Canadian prices will drop to accommodate the tariff and facilitate trade, something producers and Ottawa will want to avoid. The tariff would have closed the Canada-US propane arbitrage in the fourth quarter of last year, lifting the Edmonton, Alberta, hub price to parity to the Conway value in the US midcontinent compared with the actual 15¢/USG discount. This does not take into account rail costs that add 7-10¢/USG for US deliveries. The situation is uncertain and any impact on LPG exports will not happen instantly, market participants say. US importers of Canadian LPG would need to find domestic alternative sources of supply, but overcoming the logistical challenges to do so would take time. Western Canada's propane production stood at 270,000 b/d (675,000t) in October, while exports from the region to the US were 123,000 b/d, or 47pc of the total, the latest provincial and federal government data show. The US as of November was on course to import just under 5.4mn t of LPG in total from Canada last year, which would be up from 5mn t in 2023, customs data show. Canada's Council of the Federation, a group of regional government leaders, met with outgoing prime minister Justin Trudeau in Ottawa on 15 January to discuss the country's response to potential US tariffs. "Everything is on the table," Trudeau said after the meeting. "The clear consensus around the table is that we need to respond in measured but robust ways to the American actions, whatever they are." But Smith refused to sign a joint communique because the federal government is contemplating export tariffs on her province's oil and gas — a vital revenue source for Alberta. Smith is urging the country to use Trump's tariff imposition as the basis to look to alternative countries for energy exports instead of "keeping us fully reliant on one primary customer". Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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