For the Quarter Ending September 2021
North America
In the North American region, the prices of Propane rose effectively in the third quarter of 2021. Propane prices in the main U.S. hub reached their historic highs in September amid tight global supply and strong demand. Propane, a product of Natural gas processing, also observed a sharp decline in the inventory levels where traditionally producers kept strong stockpiles for the winter season as the US depends on LPG for their heating fuel. Propane and butane exports to Mexico surged effectively in August led by strong demand. The supply and demand imbalance driven up prices in the region as importers aimed to stockpile.
Asia Pacific
During the third quarter of 2021, the domestic market witnessed a significant rise in the prices of Propane & Butane across the Asia Pacific region. In terms of demand, strong offtakes were observed from the household and industrial applications in this quarter. Increased natural gas and crude oil prices along with bullish winter requirements supported the demand outlook during the third quarter. Various Asian traders dealt with low US stock levels which resulted in limiting exports to the Asia Pacific region.
Europe
The overall market outlook showcased an upward trajectory as the prices of Propane and Butane witnessed a steep rise in Europe during Q3 of 2021. Propane prices CIF Amsterdam-Rotterdam-Antwerp (ARA) gained to reach around $250/t since June to $778/t in September, and butane prices were up by around $240/t over the same time at $753/t, each marking the highest since 2014. Low US stock levels limited the exports just as European buyers were looking to rebuild inventory. Low European refining rates were seen restricting the regional supply, and this, compounded by Algerian supply disruption and ongoing steady reductions from Russia added to the market tightness.
For the Quarter Ending June 2021
North America
The Propane-Butane supply outlook in the North American region improved in comparison to the previous quarter, as production facilities in the USA Gulf region reported better operating efficiencies after the devastating impact from the winter storm Uri. However due to their increasing application from the residential areas, the regional LPG prices observed a hike of 36% in Texas since January 2021. According to the EIA report, total US propane exports rose 1.16 bpd, at their fourth-highest y-o-y in a particular week in May 21. Prices noted an uptrend buoyed by spike in crude oil value. Several Very Large-Scale Gas Carriers (VLGCs) were loaded from the US ports destined to China and South Korea in May.
Asia Pacific
During the second quarter of 2021, the demand of Propane and Butane in the Asia Pacific region was upbeat while supplies were seen improving with US LPG supply to East Asia not as tight as the previous quarter. Offtakes were consistent from the household and industrial applications. Supplies were balanced during the second quarter of 2021. The pricing trend continued to rally up wards with Saudi Aramco offers for the APAC region observing a multi fold surge with discussions settling at USD 530/MT and USD 525/MT for Propane and Butane, up by USD 35/MT and USD 50/MT respectively in June. Some Asian traders were seen dealing lower US exports and hence opting for Middle-East origin supplies.
Europe
Demand outlook in the European Propane Butane market remained muted due to the lower offtakes of LPG regarding the heating purpose in the offseason. Prices for Propane and Butane in Europe remain typically lower in the summer months, as demand for domestic heating wavers particularly in the key exporting country the US. However, demand outlook remained well supported from electricity generation and industrial purpose buoyed by strengthening purchasing sentiments. Limited domestic supply of both naphtha and LPG was heard pressuring the region’s supply side.
For the Quarter Ending March 2021
North America
During the first quarter of 2021, the supplies were extremely constrained, due to severe freeze weather condition in the US Gulf region. The US Gulf catastrophe led to the shortage of market supplies while the demand spiked for heating purposes, as several production facilities in the region witnessed disruption amid the freeze weather conditions. Spiked demand and sluggish supplies caused an enormous surge in the prices of Propane-Butane in the North American region. The average price of residential propane stood around USD 606/ton in US in the final week of March while Propane retail prices were assessed at USD 630/ton in the same week.
Asia-Pacific (APAC)
The supplies in the Asia Pacific region were balanced in the first quarter of 2021, owing to the new facilities opened in China, followed by the PDH (propane - dehydrogenation) plants operating at high rates to capture large market share. However, operational cuts during the Chinese New Year holidays and firming crude put some constraints in supplies. The demand spiked as the winter season hit the Asia-Pacific region, specifically from the northeast Asian region for heating purposes. Saudi Aramco, a major supplier Asia Pacific region surged the prices multiple times during the first quarter for all its importing regions. In March, the prices for Propane was around USD 624/ton while Butane settled at USD 595/ton, showing a surge of (+ USD 70/ton and +USD 65/ton) over the January settlements.
Europe
The supplies in the region remained constrained, as the imports from the US declined amid surged domestic demand of the US gulf region, followed by the extreme weather conditions in the Northwest European region. A major supplier from the Middle East showcased a multi-fold increment in the prices, further propped by surged transportation charges supporting the uptrend in the prices of Propane-Butane. However, the demand outlook remained upbeat with rising demand for heating applications.
For the Quarter Ending December 2020
Asia
Demand for Propane & Butane in the Asian market remained strong as countries like China and India are majorly depended on imports of these gases. India imports around 70-80 percent of natural gas from middle east countries. The prices of Propane and Butane increased in Q4 2020, due to increase in prices of crude oil and natural gas in APAC region. Further, due to tight supply form Middle East countries, the spot prices of Propane and Butane were higher in October 2020. The prices of Propane and Butane stabilised in December 2020. Further, the import of Propane and Butane in China has surged in Q4. China is one of the largest consumers of LPG across the globe, with demand rising from petrochemical plants and new green field projects under construction. Therefore, Argus Media Group is working with companies in China to develop CFR Ningbo price index for china. The prices of Propane & Butane witnessed an upward trend and is anticipated to follow the same trend in Q1 2021.
Europe
Rise in demand for Propane & Butane is observed in European countries due to cold weather. The surge in demand of Propane & Butane has led to increase in prices in European market. Saudi Aramco of the major producer of Propane and Butane has set contract propane price at 375 USD /MT & Butane at 380 USD/MT respectively in October 2020. 10 USD/ MT price has raised of propane, 25 USD /MT of Butane compared to September 2020. The contract priced are mapped from uplifting the product from Saudi Arabian ports of Ras Tanura, Ju’aymah and Yanbu. The demand for Propane and Butane is anticipated to increase in coming months due to winter season, and prices of Propane and Butane is anticipated to reach more than 500 USD / MT in Q1 of 2021.
North America
Surge in demand for Propane and Butane is observed in North America with change in season, the crude oil prices and natural gas prices have gradually increased from September till December 2020 by 2-4% every month. With the consistent increment in prices of the feedstock crude oil and natural gas, Propane & Butane prices in the USA, Mexico and Canada took an uptrend later in the Q4 2020. The demand for Propane and Butane has jumped due to seasonality factor. The prices of Propane and Butane in the region were reported around 400 USD /MT in December 2020. A sudden rise in prices has been witnessed in spot market due to shortage of availability of gases in North America. The prices of Propane and Butane are anticipated to increase in Q1 2021 due to surge in demand and rising prices of natural gas and crude oil across the globe.
