For the Quarter Ending March 2025
North America
In the first quarter of 2025, the Liquefied Petroleum Gas (LPG) market in the North American region experienced significant price fluctuations, reflecting tight supply conditions, extreme weather events, and changing demand dynamics. A sharp price increase was seen at the beginning of the quarter due to the combined impact of severe winter storms, which heightened demand for heating fuels and led to inventory draws. Propane and butane prices surged, driven by increased consumption, higher crude oil and natural gas prices, and a surge in LPG exports. The export demand from Asia, particularly for propane and butane, was robust, further supporting the price hikes.
However, in the mid-quarter, the market remained tight, and prices continued to rise, albeit at a slower pace, influenced by prolonged cold temperatures and strong demand for heating fuels. Exports remained strong, but LPG production faced constraints due to limited natural gas availability for production, compounding supply pressures.
Towards the end of the quarter, the market turned bearish as domestic demand for propane and butane weakened. Propane prices declined following a reduction in U.S. exports to China due to retaliatory tariffs. Similarly, butane demand dropped after the end of the winter gasoline blending season, in line with EPA regulations. Despite strong exports to Asia and Africa, the overall decline in domestic consumption led to a bearish outlook, and LPG prices softened.
APAC
During the first quarter of 2025, the LPG market in the Asian region displayed fluctuating yet relatively stable price trends influenced by a mix of supply-demand dynamics, seasonal factors, and global market conditions. The quarter began with a significant reduction in LPG prices, driven by Saudi Aramco's adjustments in response to an oversupply of propane and butane, which affected the Asia-Pacific and Middle Eastern markets. Despite the lower prices, demand remained stable due to consistent supply and steady consumption. As the winter season progressed, increased demand for propane, driven by heating needs, led to a price rebound in the mid-quarter. This uptick was further supported by a reduction in inventory levels and strong export demand, particularly from the petrochemical sector. However, as temperatures rose in March and heating demand declined, LPG prices softened towards the end of the quarter. Additionally, lower crude oil prices helped ease manufacturing costs, contributing to the bearish market sentiment. Throughout the quarter, supply remained balanced, with Saudi Arabia continuing to meet the region's needs, although geopolitical factors, such as reduced Iranian exports, influenced the supply chain.
Europe
The price trend for Liquefied Petroleum Gas (LPG) in Europe during Q1 2025 exhibited significant volatility, driven by multiple intersecting factors. At the beginning of the quarter, LPG prices surged due to tight supply, primarily driven by escalating crude oil prices, which exerted upward pressure on manufacturing costs. Additionally, the surge in freight charges and logistical bottlenecks, particularly in the Amsterdam-Rotterdam-Antwerp (ARA) region, further strained supply chains, pushing prices even higher. However, the volatile nature of the market became evident during the mid-quarter. A sharp decline in crude oil prices led to a temporary dip in LPG prices. Despite this, the market remained buoyant due to continued strong demand for heating fuels and blending components, especially driven by the extreme winter weather. Prices continued to swing, showing slight reductions as supply pressures eased but remained constrained by winter-related demand. As the winter season began to wane in March, the price trend shifted again towards the end of the quarter. LPG prices dropped due to decreasing crude oil prices and declining demand for heating fuels. This downward momentum continued as warmer weather reduced heating demand. By the end of the quarter, LPG prices had stabilized, reflecting a complex interplay of global supply dynamics, reduced demand, and shifting geopolitical pressures.
Middle East
In Q1 2025, the Liquefied Petroleum Gas (LPG) market in the Middle East region experienced a fluctuating yet generally steady price trend, shaped by a mix of supply-demand dynamics, seasonal factors, and global market conditions. At the start of the quarter, LPG prices saw a significant decrease, driven by pricing adjustments from Saudi Aramco in response to an oversupply of propane and butane. These price reductions, initially aimed at addressing the market surplus, impacted the Asia-Pacific and Middle Eastern regions, although the oversupply did not indicate a lack of demand. As the quarter progressed, LPG demand began to rise, particularly due to increased heating fuel requirements during colder weather, leading to a shift in pricing strategy. Saudi Aramco raised prices mid-quarter, despite falling crude oil prices, as propane demand peaked with increased home heating needs. However, by the end of Q1, as winter temperatures moderated, the market became bearish. LPG prices dropped, driven by reduced heating fuel demand and falling crude oil prices, which lowered manufacturing costs. Despite the softening domestic demand, the supply situation remained balanced, with Saudi exports maintaining strong performance, particularly in the Asian and African markets. By the end of Q1, LPG prices stabilized, reflecting moderate domestic demand, and continued robust export activity.
For the Quarter Ending December 2024
North America
In Q4 2024, the Liquefied Petroleum Gas (LPG) market in the US region experienced a period of increasing prices. The US LPG prices rebounded during October 2024 on the back of a shift in demand due to colder weather with butane prices. The significant rise in the LPG demand was attributed to both escalations in downstream domestic as well as industrial applications. As winter approached, the demand for LPG as a heating fuel surged, particularly in regions experiencing colder-than-average temperatures.
Additionally, the pre-Thanksgiving holiday season in November 2024 also contributed to increased demand and higher prices. On the other hand, a notable decline in inventory levels further tightened the market supply, contributing to the upward pressure on prices. Moreover, Labor disputes at US ports exacerbated the situation, leading to additional supply constraints and price hikes.
However, the US LPG prices declined during December 2024 despite the high demand for blending fuels to settle at USD 7.3/MMBTU Butane FD Texas, while USD 7.7/MMBTU Propane DEL Texas.
APAC
The fourth quarter of 2024 has seen a challenging environment for Liquefied Petroleum Gas (LPG) pricing in the APAC region, characterized by increasing prices. LPG prices in China rose in October 2024 due to an upward adjustment of Saudi Aramco-provided quotations amid a rise in demand for heating and blending fuels. Moreover, a rise in the feedstock Crude oil prices worked as a benchmark for LPG contracts in the Asia-Pacific area, including China. Additionally, the onset of colder temperatures has increased demand for heating fuels, including propane. This surge in demand has led to a steady rise in inland propane market prices. The limited availability of supply from the US has tightened the market and underpinned price levels. Likewise, in November, the supply from the USA was affected due to hurricane season, and the supply from Saudi was disrupted due to an escalating war which affected energy infrastructure, including LPG facilities, and declined export levels significantly. However, the LPG prices in China remained unchanged during December 2024 and Saudi Aramco kept their official selling prices (OSPs) unchanged due to a shift in market dynamics.
Europe
Throughout Q4 2024, the Liquefied Petroleum Gas (LPG) market in Europe experienced a period of significant price increases, compared to the third quarter. In October 2024, the attack on Israel by Iran, sent feedstock crude oil soaring and, consequently, made the LPG production costs expensive. Additionally, the onset of colder temperatures has increased demand for heating fuels, including propane. This surge in demand has led to a steady rise in inland propane market prices. Several buyers have encouraged restocking activity, limiting spot volumes and pushing up prices. As blending fuel demand intensified, participants were scrambling to restock ahead of anticipated price increases which surged the LPG prices. Moreover, the supply from the USA to Europe was affected in November due to hurricane season which disrupted energy infrastructure, including LPG facilities. As a ripple effect, the export level from the USA has declined significantly during this timeframe. However, after witnessing immense stability, the European LPG prices in Belgium declined during December 2024 on the back of a shift in demand and supply surplus.
South America
The South American LPG market witnessed a period of significant price escalation throughout the fourth quarter of 2024, a stark contrast to the relative price stability observed in the preceding quarter. Firstly, the geopolitical tensions arising from the attack on Israel by Iran sent shockwaves through the energy markets, causing a sharp increase in crude oil prices. As crude oil serves as a key input for LPG production, these escalating costs inevitably translated into higher production expenses for LPG manufacturers. Secondly, the onset of colder weather across Brazil intensified the demand for heating fuels, particularly propane, a key component of LPG. This surge in demand created a supply-demand imbalance, driving up inland propane prices. The situation was further compounded by disruptions to US LPG exports in November. The hurricane season wreaked havoc on energy infrastructure, including LPG facilities in the US, leading to a significant decline in export volumes. This supply shock further tightened the market and exerted upward pressure on prices. However, a shift in market dynamics led to a surprising reversal in December. Brazilian LPG prices experienced a decline, primarily driven by a rebalancing of supply and demand.
MEA
The LPG market in the Middle East region faced headwinds during the fourth quarter of 2024, primarily driven by escalating prices. In Saudi Arabia, LPG prices climbed in October due to a combination of factors. Firstly, Saudi Aramco increased its official selling prices (OSPs), reflecting a surge in demand for heating and blending fuels as winter approached. Secondly, rising crude oil prices exerted upward pressure on LPG contracts across the region, given its role as a key benchmark. Concurrently, the onset of colder weather significantly boosted demand for propane, a key component of heating fuels, leading to a tightening of supply and a subsequent rise in inland prices. The situation further deteriorated in November. The escalating conflict in the Middle East impacted Saudi Arabian supply chains, including LPG facilities. This disruption significantly reduced export volumes, further tightening the market. However, a shift in market dynamics led to a surprising outcome in December. Saudi Aramco maintained its OSPs unchanged in December amid the anticipated ramp-up in heating demand due to falling temperatures in late November and blending appetite from the gasoline sector did not materialize as expected.
For the Quarter Ending September 2024
North America
In Q3 2024, the Liquefied Petroleum Gas (LPG) market in the US region experienced a period of decreasing prices, followed by an uptrend. During July 2024, the US LPG market experienced a significant price surge due to supply disruptions and increased production costs. Production setbacks, primarily stemming from high crude oil prices and the looming threat of hurricanes, curtailed LPG output.
A contributing factor to the tight supply situation was the decision by refineries, including LyondellBasell's Houston facility, to prioritize petrochemical production over LPG due to operational challenges. This strategic shift further reduced LPG output, intensifying the supply crunch.
However, the LPG market declined significantly during August 2024 due to a rebound in exports. The hurricane's impact led to a slowdown in production activities, but as operations resumed and maintenance activities concluded, export volumes surged in August 2024. Moreover, the decline in natural gas prices has reduced demand for LPG, as the two fuels are often used interchangeably. This decreased demand has further contributed to lower LPG prices during September 2024.
APAC
The third quarter of 2024 has seen a challenging environment for Liquefied Petroleum Gas (LPG) pricing in the APAC region, characterized by increasing prices and market volatility. During July 2024, Saudi Aramco, the state oil producer, kept its official selling prices (OSPs) unchanged for LPG which affected the Asian market. However, the market has significantly rebounded during August 2024, despite supply constraints and geopolitical tensions. These factors have led to a complex pricing landscape, with prices experiencing significant fluctuations throughout the quarter. Likewise, a decrease in US butane exports further tightened the market dynamics. Production setbacks and the looming threat of hurricanes curtailed LPG supply from the USA to Asia. The Persian Gulf-Japan route, a vital corridor for LPG trade, has experienced a significant drop in shipments due to a lack of spot LPG bids from Middle Eastern producers, leading to increased prices during September 2024. The latest quarter-ending price for Butane CIF Shanghai in China stood at USD 655/MT, reflecting the bullish sentiment in the market.
Europe
Throughout Q3 2024, the Liquefied Petroleum Gas (LPG) market in Europe experienced a period of significant price increases, with the Netherlands being at the forefront of these changes. Several factors have contributed to this price surge. European LPG supplies were facing a squeeze due to a decline in shipments from the US. More competitive prices were pulling US LPG cargoes eastward, leaving Europe with fewer options. Logistical issues at the US Gulf Coast including Hurricanes further dampen exports. As per EIA, the export of Propane and Propylene has declined from 1827 thousand per barrel to 1641 thousand per barrel during July 2024. While overall domestic demand was subdued due to the summer season, industrial consumption increased, adding pressure on prices during August 2024. Despite the rise in export levels of US LPG, production setbacks, curtailed LPG supply within Europe due to maintenance shutdowns which surged the price trend during September 2024. The upcoming switch to the higher Reid Vapor Pressure winter gasoline blending specification inclined the buying appetite for butane in recent weeks. Insufficient US volume supply combined with unfavorable arbitrage dynamics and higher US terminal costs created an artificial demand during this timeframe.
MEA
In Q3 2024, the Liquefied Petroleum Gas (LPG) market in the Middle East and Africa region experienced a period of increasing prices. Saudi Aramco, the state oil producer, kept its official selling prices (OSPs) for LPG unchanged for July. This stability set the tone for the market and contrasted with Algeria's Sonatrach, which raised prices due to rising demand in the Mediterranean. However, factors such as supply constraints, geopolitical tensions impacting shipping routes, and increased demand from the petrochemical industry contributed to the price hikes in August 2024. Moreover, seasonal demand for propane typically rises during the winter months due to its use for heating which increased prices during September 2024. The price comparison between the first and second half of the quarter showed a 3% increase, highlighting a progressive escalation in prices. As the quarter concluded, the price stood at USD 595/MT of Butane Ex-Works Dhahran in Saudi Arabia, indicating a positive pricing environment characterized by steady growth and robust demand.
South America
Throughout Q3 2024, the Liquefied Petroleum Gas (LPG) market in South America experienced a period of significant price increases, with Brazil being at the forefront of these changes. Several factors have contributed to this price surge. Supply disruptions, particularly due to severe flooding in key regions, have led to critical shortages and subsequent price hikes during July 2024. The closure of major distribution facilities has further exacerbated the situation, pushing prices upwards. Additionally, logistical challenges and reduced distribution capacity have played a significant role in shaping the pricing environment during August 2024. Brazil, in particular, has seen the maximum price changes within the region. The overall trend for LPG prices in Brazil has been on a steady incline, with a percentage change from the previous quarter in 2024 stood at 11%, indicating a continuous upward trajectory. Moreover, the comparison between the first and second half of the quarter revealed a 5% price increase. The quarter-ending price for Butane CFR Santos in Brazil reached USD 671/MT, reflecting a consistently increasing sentiment in the pricing environment.
For the Quarter Ending June 2024
North America
The North American region experienced a mixed price trend for Liquefied Petroleum Gas (LPG) in Q2 2024, where prices witnessed an uptrend in June followed by a significant downtrend as several significant factors influenced market prices during this quarter.
During April 2024, with the official switch to summer gasoline, the pressure on butane prices eased significantly along with the steadily rising LPG inventories. One of the main factors was the high inventory levels of propane and butane, which led to a supply glut in the market. This was due to increased production and a lack of buying interest in the civilian sector, as it was the off-season for LPG demand. Additionally, the ramp-up in production, particularly from propane dehydrogenation (PDH) units, contributed to the surplus of LPG during May 2024.
However, the LPG market in the USA experienced a sharp rebound in June 2024 due to a production disruption amidst the threat of hurricanes like Beryl's forced production cuts, further limiting supply. The anticipation of Hurricane Beryl hitting the Gulf of Mexico created additional anxieties. Market participants feared the storm would disrupt transportation and drive up freight costs, making it even harder to get LPG to market as the quarter-ending price for Butane FD Texas in the USA was USD 7.1/MMBTU.
APAC
In Q2 2024, the APAC region's Liquefied Petroleum Gas (LPG) market experienced a notable decline in prices, driven primarily by an oversupply of LPG and subdued demand from downstream industries. A key factor contributing to this price drop was the increase in production from major exporters, including the Middle East and the United States, which flooded the market with excess supply during April 2024. Additionally, the transition from winter to summer reduced the need for LPG as a heating source, further exacerbating the supply glut. Economic conditions in various countries also played a role, as businesses operated cautiously due to geopolitical uncertainties and declining crude oil prices, which lowered LPG production costs during May 2024. Focusing on China, the country saw the most significant price changes within the APAC region. The overall trend showcased a steady decline in LPG prices throughout the quarter, primarily due to a combination of seasonal factors and changes in industrial demand. Notably, there was a 17% drop in prices compared to the same quarter last year and a 16% decrease from the previous quarter of 2024.
Europe
In Q2 2024, the Liquefied Petroleum Gas (LPG) market in Europe experienced a consistent upward pricing trend. Several key factors influenced this increase. The primary drivers were logistical bottlenecks and unexpected export opportunities, which created supply constraints during June 2024. Additionally, global market dynamics, such as the diversion of large LPG cargoes towards Asia due to robust demand from Chinese propane dehydrogenation plants, tightened regional supplies. A notable decline in crude oil prices during May 2024, a crucial feedstock for LPG production, mitigated production costs, but this was outweighed by the substantial supply pressure. While, seasonality played a role, with the transition from winter to summer resulting in decreased demand for heating. However, disruptions along vital waterways, like the Rhine River, exacerbated the supply tightness during June which offset the low demand and hence resulted in a significant uptrend. Focusing on Germany, which witnessed the most significant price changes, the overall trend displayed a steady increase. The percentage change from the same quarter last year was 6%, reflecting a substantial rise. Concluding the quarter, the price of LPG in Germany stood at USD 1081/MT (Euro/1000 ltr) FD-Hamburg.
MEA
In Q2 2024, the Liquefied Petroleum Gas (LPG) market in the MEA region has experienced a trend of declining prices primarily driven by ample supply and subdued demand. Several pivotal factors have influenced this downward trajectory. The seasonal transition from winter to summer has diminished the demand for LPG, particularly for heating purposes, further contributing to the price decline during May 2024. Additionally, a shift in the blending sector's interest toward other fuels has lowered butane's market value. Furthermore, fluctuations in crude oil prices have impacted production costs, adding to the bearish market sentiment. While Propane prices remained steady in Saudi Arabia, Butane prices witnessed a decline during June 2024 due to an oversupply situation, exacerbated by increased LPG production and exports from the United States, has flooded the market with more butane and propane than needed, causing a price drop during June 2024. Focusing on Saudi Arabia, which has seen the most significant price changes, the overall trend has been decidedly negative. The seasonality effect is evident as the warmer weather reduced heating demand, and petrochemical industries showed less interest in propane. From the previous quarter in 2024, there was a 7% decrease, reflecting a consistent downtrend.
South America
The second quarter of 2024 for Liquefied Petroleum Gas (LPG) in the South American region has been characterized by an environment of escalating prices. Various factors have contributed to this surge in market prices, including limited supply, high demand, geopolitical tensions in major LPG-producing regions, and escalating freight rates. These factors have created a challenging scenario, leading to a steady increase in prices on a monthly basis. Additionally, global trends of declining prices have not impacted the region as significantly as expected, with Brazil, in particular, experiencing the maximum price changes. Brazil, as a key player in the South America LPG market, has seen significant fluctuations in prices throughout the quarter. Floods in Southern Brazil, particularly Rio Grande do Sul, significantly disrupted LPG supply and distribution. Torrential rains in southern Brazil, particularly Rio Grande do Sul, hampered LPG distribution. This key region saw a 7-10% decrease in LPG distribution within May 2024. Copa Energia, a major distributor responsible for 30% of the state's LPG distribution, had to shut down its Canoas city unit due to the rain. According to Alexandre Silveira, minister of mines and energy, the region was severely damaged by torrential rains that began at the end of April, severely disrupting flows, and leaving the LPG market in the southern state working at roughly 90 percent capacity in late May.
