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Argus International LPG

Daily international LPG prices and market commentary

Issue 14111 | Friday 06 June 2014

OVERVIEW

PRICES

Cfr Far East freight rates continued to rise.


European prices were lifted by stronger crude and paper.
US prices were mixed at the weeks end.
Propane: Mt Belvieu non-LST diff to cif ARA

Key prices

$/t

$/t

200
100

Bid

Ask

Propane cif ARA (large cargoes)

+4

758 - 768

+5

Butane cif ARA (large cargoes)

+6

742 - 752

+7

daf Brest propane

685 - 702

daf Brest propane-butane mix

650 - 670

Propane Argus Far East Index (AFEI)

895

+1.0

Butane Argus Far East Index (AFEI)

892

+6.0

Argus Mixed Index

893.5

+3.5
/USG

Americas: Propane Mont Belvieu pipeline fob (Jun)

VWA

-100

Low

High

+0.500
+0.000
+3.969

-200

US propane del Japan (AUSJ) $/t

+4.0

780.0 -

781.5

+4.0

-300

US propane del ARA (AUSE) $/t

+4.0

690.0 -

691.5

+4.0

-400
04 Dec 13

101.086 +0.875
100.857 +0.750
+3.969

100.750 - 101.500
100.750 - 101.000
595.218 - 596.524

Non-LST
LST
USGC export fob $/t

International comparisons (Jun)


05 Feb 14

04 Apr 14

$/t
Propane

06 Jun 14

Butane

Argus North Sea Index (ANSI)

755.5

713.0

Sonatrach fob Bethioua

755.0

730.0

Saudi Aramco

835.0

835.0

30

KPC (Kuwait)

835.0

835.0

Argus Middle East netback

792.0

789.0

20

Argus arbitrage

$/t

Propane: ARA diff to Med, cif

Propane

10
0
-10

NW Europe

AFEI

Physical spot

528.25

763.00

895.00

Jun

526.25

759.00

896.00

Jul

528.25

756.00

895.00

Aug

531.50

756.00

891.00

NWE diff to
Mt Bel

AFEI diff to
Mt Bel

AFEI diff to
NWE
-132.00

$/t

Regional assessments
Propane

-20
-30
06 Dec 13

$/t
Mt Belvieu

06 Feb 14

04 Apr 14

06 Jun 14

CONTENTS
Northwest Europe
Mediterranean, FSU
International swaps
Middle East
Asia-Pacific
US
Latin America
Industry news

Copyright 2014 Argus Media Ltd

Physical spot

-234.75

-366.75

Jun

-232.75

-369.75

-137.00

Jul

-227.75

-366.75

-139.00

Aug

-224.50

-359.50

-135.00

Naphtha

2
3
3
4
4
7
9
9

Bid

Ask

+1.50

cif northwest Europe

+1.50

926.00 - 928.00

cif Mediterranean

+1.50

916.25 - 918.25

+1.50

cfr Japan

+11.00

939.50 - 947.00

+11.50

fob Mideast Gulf

+11.00

904.25 - 911.75

+11.50

LPG freight

$/t

VLGC Mideast Gulf-Japan 40,000-44,000t

103

1,800t Tees-Lisbon butane

105

1,800t Tees-ARA

45

Argus International LPG

Issue 14111 | Friday 06 June 2014

NORTHWEST EUROPE

Northwest Europe and Mediterranean

$/t

Stronger crude helped lift paper values but the physical


market showed little sign of change. Rumours that the BW
Lord, currently loading at Enterprise in the US gulf, might
come to Europe, were uncorroborated but provided the
only real point of interest in an otherwise dull market. So
far the only confirmed US tonnes set to arrive in northwest
Europe from the US are due on Monday off the Clipper Sun.
Gunvor was back bidding again for 20-24 June arrival ToT
tonnes from 50:50 $758/t and balance June cif ARA -$6/t,
raised to $762/t on the fixed price and -$5/t on the floating
element. With balance June paper assessed at $759/t,
the bid was worth $758/t basis Flushing, now only a dollar
under paper, though still not tempting to any possible
sellers who remain aloof.
Thin supplies of large cargo butane are helping to lift
theoretical values. After recently falling to a seven-year
low of under 78pc of naphtha, buyers say that the prospect
of acquiring tonnes under 80pc is now extremely unlikely
with something in the low 80s pc increasingly probable.
However offers are scarce with no further information on
suggestions of Algerian tonnes heading north that circulated
on Thursday. With naphtha values moving higher the price
for butane firmed on both a relative and an outright basis.
Propane coaster prices tracked movements on the
large cargo market at the close of the week, as spot trade
remains in the doldrums. There were reports of a middle
of the month cargo becoming available next week from
northern France, but whether anyone will be there to pick
it up is uncertain with buyers currently thin on the ground.
But again the butane coaster market provided contrasting
vitality as petrochemicals continue to pick up tonnes, with
four confidential cif deals reportedly done. Two were for
higher quality butane while the other two were for product
high in olefins, ethane and sulphur at discounted levels.
Delivered prices relative naphtha were heard in the region of
the mid-70pc range up to the high 80pc marker, depending
on quality, volumes and loading times. This leaves the price
ratio to naphtha at 82-83pc, pulling the outright price down
a touch from yesterday despite naphthas small gain. There
were no discussions or deals heard on the fob side, with
Petredec not returning to offer a 4,000t cargo, the price
consequently drifting sideways.
Spot propane trading activity in the AmsterdamRotterdam-Antwerp area continued to drift with warm
weather and a holiday weekend sapping already sluggish
interest in LPG. With little change in either paper or large
cargo values and no substantive changes to local supply and
demand balances values moved sideways.

Copyright 2014 Argus Media Ltd

Bid

Ask

768

+5

Propane
cif ARA (large cargoes)

+4

758 -

fob northwest Europe (small)

+5

668 -

678

+5

cif ARA (small)

+5

713 -

723

+5

670 -

680

690 -

700

755 -

765

fob Mediterranean (small)

790 -

800

fca Mediterranean (rail)

765 -

fob ARA (barge)


fca ARA (rail)
cif Mediterranean (large)

+5

Propane averages (Jun)

+5

775
Price

cif ARA (large cargo)

761.800

+0.300

fob ARA barge

676.429

Butane
cif ARA (large cargoes)

+6

fob northwest Europe (small)


cif ARA (small)

752
705

760 -

770

fob ARA (barge)

750 -

760

fca ARA (rail)

760 -

770

cif Mediterranean (large)


fob Mediterranean (small)
Butane averages (Jun)

-3

742 695 -

+5

750 -

760

785 -

795

+7
-3

+5

Price

cif ARA (large cargo)

740.100

+1.725

fob ARA barge

756.143

Crude
Argus North Sea Dated

Price

108.64

+0.26

Ice Brent futures settlement


Jul

108.61

-0.18

Aug

107.86

-0.25

Sep

107.16

-0.28

Indications that Shell may be running its Moerdijk


cracker at slightly lower rates did little to a slow spot
market. Small ship butane values appear to be picking up
and this is providing some support for the barge sector but
no fresh trading activity was reported.

Argus successfully completes Iosco assurance review


Argus has successfully completed an external assurance
review of its oil price benchmarks, including those for
LPG markets. The review was carried out by professional services firm PwC. An independent and external
review of oil benchmark prices is required on an annual
basis by international regulators in order to satisfy
Ioscos Principles for Oil Price Reporting Agencies (the
PRA Principles). For more information and to download
the report visit our website
http://www.argusmedia.com/About-Argus/How-We-Work

Page 2 of 11

Argus International LPG

Issue 14111 | Friday 06 June 2014

MEDITERRANEAN

FSU

$/t

Spot trade in the Mediterranean was limited at the end of


the week with discussion on propane and butane sparse.
Reports that BP had managed to offload their butane cargo
offered over the last few days from Lavera surfaced but
the deal was unconfirmed. Prices on both propane and
butane reflected movements in northwest Europe, which
in turn were influenced more by crude and naphtha than
any notable market activity. There were no new reports
of Black Sea supplies shortening today, but even trimmed
output from the region would likely have a negligible
impact while buying is lacklustre.

FSU

Ask

fob Black Sea propane-butane mix

660 -

694

fob Black Sea propane

650 -

685
680

fob Black Sea butane

655 -

daf Brest propane-butane mix

650 -

670

daf Brest propane-butane mix /t

477 -

492

daf Brest propane

685 -

702

daf Brest propane /t

503 -

515

daf Brest differential to cif ARA (large)


daf Ukraine propane-butane mix

660 -

675

Argus RBS propane-butane mix index

640 -

-1

670

fot Burgas (Lukoil posted) propane-butane mix

809

+3

Argus Polish Domestic Index (APDI)

768

+1

International swap prices

Daf Brest assessments remained unchanged since they


correlate with buyers and sellers parity levels.
Prices in the Black Sea ports held steady while the
discussions were inside Thursdays Argus value range.

-69.5

$/t

Bid

Ask

Propane northwest Europe

INTERNATIONAL SWAPS

Jun

+4

757 -

761

+4

Jul

+4

754 -

758

+4

Aug

+3

754 -

758

+3

Sep

+2

756 -

760

+2

Oct

+1

759 -

763

+1

763 -

767

755 -

759

763 -

767

-1

731 -

735

Jun

+3

922 -

924

+3

Jul

+4

911 -

913

+4

Aug

+2

900 -

902

+2

Nov

Paper trade was thin at the close of the week with some
early activity on July CP and later in the day for June cif
ARA the only notable exceptions. Values edged upwards
across the Asia-Pacific, Mideast and northwest European
markets, as well as on naphtha, to keep the propanenaphtha spread stable and help support slight gains on
east-west and AFEI-CP spreads.
A total of four June cif ARA deals were recorded during
the 16:15-16:30 assessment period, all of which were for
2,000t, at $761/t, $760/t, $758/t and $756/t, moving
lower through the 4.15-4.30pm timeframe. This pushed
the front month swap up $4/t to $759/t. But a slight
easing of the contango from July through to December
helped to level off any gains so that the later month swaps
were relatively unchanged.
Naphtha swaps also rose today, albeit more gently,
leaving the June propane-naphtha spread $1/t higher at
-$164/t. And the movements in later months were similar
to those seen on propane leaving spreads further along
the curve in similar positions to yesterday finding the
narrowest point in January 2015 at -$105/t.
Mideast swaps rose slightly more robustly than their
Asia-Pacific brethren to push the AFEI-CP spread out to
$90/t in July one dollar below a deal done earlier in the
day. Meanwhile the rises in Asia-Pacific pushed the eastwest spread out to $137/t in June and $139/t in July.

Copyright 2014 Argus Media Ltd

Bid

3Q14

+3

4Q14
1Q15

+3
-1

Naphtha northwest Europe

Propane CP Middle East


Jul

+6

803 -

807

+6

Aug

+5

803 -

807

+5

Sep

+5

805 -

809

+5

Jun

+7

894 -

898

+7

Jul

+8

893 -

897

+8

Aug

+6

889 -

893

+6

Argus Far East Index

$/t

Butane: AFEI diff to cif Med


250
200
150
100
50
0
-50
-100
-150
03 Dec 13

Page 3 of 11

04 Feb 14

02 Apr 14

06 Jun 14

Argus International LPG

Issue 14111 | Friday 06 June 2014

Reported done ($/t)

Middle East and Asia-Pacific averages

$/t
Price

756 (2kt), 758 (2kt), 760 (2kt), 761 (2kt) Jun cif ARA
761 Jul cif ARA
757 Aug cif ARA
3 Jun-Jul cif ARA
802.5, 804, 805, 810 (x2) Jul CP
91 Jul AFEI-CP
86 Aug AFEI-CP

Middle East (Jun)


Propane

-10.526 -1.082

Butane

-10.263 -0.819

Argus Far East Index (Jun)

MIDDLE EAST
July paper swaps were valued at $803/t with a trade done
at that level before Asian timestamp amid a bid-offer range
of $800-$805/t.
The spot differential for June loading propane cargoes
in the Mideast Gulf were maintained at a $30/t discount
against the announced June CP of $835/t.
As a deal was seen at -$5/t for July propane/butane CP
paper swap, the spot differential for June loading butane
cargoes in the Mideast Gulf was assessed at a $25/t discount
against the June CP.

ASIA-PACIFIC

Propane

887.200 +1.950

Butane

885.000 +1.750

11+11 propane-butane mix (Jun)

886.100 +1.850

$/t

Propane: AFEI diff to Mt Belvieu


500
400
300
200
100

Refrigerated

0
04 Dec 13

Discussions on the Asia-Pacific refrigerated markets on

05 Feb 14

04 Apr 14

06 Jun 14

$/t

LPG arbitrage
Northwest Europe

Mt Bel differential to NWE


Physical spot

-234.75

Jun

-232.75

Jul

-227.75

Aug

-224.50

Physical spot

763.00

Jun

759.00

Jul

756.00

Aug

756.00

Mont Belvieu
Physical spot

528.25

Jun

526.25

Jul

528.25

Aug

531.50

Physical spot

-132.00

Jun

-137.00

Jul

-139.00

Aug

-135.00

AFEI

MT Bel differential to AFEI

Copyright 2014 Argus Media Ltd

NWE differential to AFEI

Physical spot

-366.75

Jun

-369.75

Jul

-366.75

Aug

-359.50

Page 4 of 11

Physical spot

895.00

Jun

896.00

Jul

895.00

Aug

891.00

Argus International LPG

Issue 14111 | Friday 06 June 2014

Friday were mainly focused across tenders that were placed


during the week.
Taiwans Formosa Plastic tender issued yesterday was
awarded at July cfr Japan naphtha minus low $50s/t for
a 11,000t+11,000t cargo due for arrival on any five days
between 6-15 July in Mailiao.
Taiwans CPC tender for a 22,000t+22,000t cargo due
for arrival over 6-15 July attracted ten offers and was
reportedly awarded at July cfr Japan naphtha minus low
$70s/t.
Meanwhile, the freight cost from Ras Tanura to Chiba
continued to soar above $100/t with a recent fixture done
at $105/t. On-going freight discussions for VLGCs were
heard to be in the range of $110-$115/t. With freight
cost returning to historical highs, buyers that had no
requirement for prompt cargoes preferred to wait out for
freight rates to correct downwards. On the other hand,
sellers remained hesitant of placing firm offers before
getting clearer directions in VLGC freight levels.
Overnight discussions remained thin for 22,000t propane
cargoes due for first-half July arrival. During the Asian
trading window session, an European and a US trader
resurfaced with their respective interest for second-half
July arrival 22,000t cargoes. The European trader posted
a bid for 22,000t propane due for arrival in second-half
July at July CP +$90/t, which equated to $893/t. The US
trader placed a corresponding offer at July FEI +$9/t, which
equated to $903/t or July CP +$100/t. No deals were seen
during the window session.
With the bid-offer range almost similar to yesterdays
levels, cfr propane premiums for first-half July were
maintained at $92/t. As such, 22,000t propane cargoes
arriving over 1-16 July were assessed at $895/t or July CP
+$92/t basis Japan and south China.
The premium for 11,000t+11,000t cargoes were assessed
at $88/t, in line with a recent first-half July deal that was
done around that level. As such, 11,000t+11,000t cargoes

Asia-Pacific
Timing

Gulf CP fob

Jun

Jun

Japan CP cfr

Jun

1H Jul

Japan cfr

+1
+1

58 /
893

62

+1

- 897

+1

1H Jul

+1

58 /

62

+1

2H Jun

+1

58 /

62

+1

Jun

2H Jun

+1

East China cfr

+1

South China CP cfr


South China cfr

+1

893

- 897

58 /
893

Argus Far East Index (AFEI)

62

- 897
895

+1
+1
+1
+1.0

Butane
Gulf CP fob

Jun

Jun

+5

Japan CP cfr

Jun

1H Jul

+6

Taiwan CP cfr

Jun

1H Jul

+6

East China CP cfr

Jun

2H Jun

Japan cfr

+6

East China cfr

+6
+6

South China CP cfr

Jun

2H Jun

South China cfr

+6
+6

West coast India CP cfr

Jun

Jun

+6

-30 / -20
55 /
890

59

- 894

+5
+6
+6

55 /

59

55 /

59

+6

- 894

+6

890

55 /
890

+6

59

+6

- 894

+6

50 /

Argus Far East Index (AFEI)

54

892

+6
+6.0

11+11 propane-butane mix


Japan cfr

+3

891

- 896

South China cfr

+3

891

- 896

Argus Mixed Index

893.5

+4
+4
+3.5

Propane pressurised
South China CP fob

Jun

South China fob


South China CP cfr

Jun

South China cfr


Vietnam CP cfr

Jun

Jun

-10

Jun

-10

60

-10

885 / 895

50 /

-10

Jun

-10

90

-10

Jun

-10

915 / 925

-10

Jun

-10

105 / 115

-10

80 /

Butane pressurised
South China CP fob

Jun

South China fob


South China CP cfr

Jun

South China cfr


Jun

Jun

-10

Jun

-10

Jun

-10

Jun
Jun

-200

-250

-50

-300

-100

-350

-150

-400
-450
04 Dec 13

Page 5 of 11

05 Feb 14

60

-10

885 / 895

50 /

-10

90

-10

-10

915 / 925

-10

-10

105 / 115

-10

80 /

$/t

Butane: Mt Belvieu diff to cif ARA

50

Copyright 2014 Argus Media Ltd

-35 / -25

Jun

-150

06 Jun 14

Jun

100

02 Apr 14

Ask

East China CP cfr

-100

04 Feb 14

Bid

Taiwan CP cfr

150

-200
03 Dec 13

Propane

Vietnam CP cfr

$/t

Propane: Saudi Aramco diff to AFEI

$/t
CP
basis

04 Apr 14

06 Jun 14

Argus International LPG

Issue 14111 | Friday 06 June 2014

due for arrival over 1-16 July were assessed at $893.5/t


basis Japan and south China. PetroVietnam issued a buy
tender for 22,000t+22,000t cargo due for arrival over 20
June to July 10. The tender closes on 9 June.
Fresh demand for butane from Far Eastern
petrochemical crackers remained low as majority had
procured their requirements for July. 22,000t butane
cargoes due for arrival over 1-16 July basis Japan and south
China were assessed at $892/t, about $38/t lower than July
cfr Japan naphtha prices.

China wholesale propane/butane mix

yuan/t

Bid

Ask

East China
Ex terminal
Ningbo

6,200 - 6,250

Wenzhou

6,150 - 6,200

Taicang

6,200 - 6,250

Shanghai

6,300 - 6,400

Zhangjiagang

6,200 - 6,250

Fujian

6,500 - 6,600

Ex refinery

Pressurised

Shanghai

The surplus from recently imported cargoes during April and


May continued to cause south Chinese terminals to lower
their offer prices.
Fob south China offers were placed as low as $890/t or
June CP +$55/t. Traders were heard to be actively seeking
first-half June cargoes from south China and send them to
the Philippines, Bangladesh and Vietnam.
In Vietnam, selling ideas were around June CP +$110/t
cfr Haiphong amid pressurised freight costs of around $50/t
from south China to Haiphong.
Buying interest was dismal as traders viewed July CP to
be lower than the announced June CP of $835/t for both
propane and butane.
The Chinese domestic markets ended the week on a
steady note.
Ex-terminal prices in south China were steady at
6,100-6,600yuan/t for mixed cargoes, which equated to
$868-939/t on cfr basis.
No price changes were seen at Maoming and Guangzhou
after Wednesdays price cuts due to limited buying interest
and moderate stockpiles.
Ex-terminal prices in east China were also left
unchanged at Yn6,150-6,600/t amid thin trading volumes.

Zhenhai

6,110 - 6,510

Yangzi

6,040 - 6,090

$/t

Japan: Butane diff to naphtha

5,890 - 5,990

Fujian

5,850 - 5,900

Gaoqiao

5,880 - 5,980

Qingdao

5,750 - 5,850

South China
Ex terminal
Zhuhai

6,150 - 6,200

Shenzhen

6,550 - 6,600

Raoping

6,100 - 6,150

Nansha

6,200 - 6,300

Shantou

6,100 - 6,150

Yangjiang

5,850 - 5,900

Ex refinery
Maoming

5,760 - 5,810

Guangzhou

5,950 - 6,000

Northeast China ex refinery


Daqing

6,070 - 6,170

Dalian

-200

6,300 - 6,400 -200

Northwest China ex refinery


Urumqi

4,900 - 5,000

Inland China ex refinery


Lanzhou

-100

Yan-An

5,350 - 5,400 -100


5,350 - 5,400

Propane LST ratio to Nymex WTI


80

250
200

70

150
100

60

50

50

0
-50

40

-100
-150
09 Dec 13

07 Feb 14

Copyright 2014 Argus Media Ltd

07 Apr 14

06 Jun 14

30
09 Dec 13

Page 6 of 11

07 Feb 14

08 Apr 14

06 Jun 14

Argus International LPG

Issue 14111 | Friday 06 June 2014

A 11,000t refrigerated cargo is expected to arrive in east


China on 11 June.
In north China, prices at Dalian dropped by Yn200/t to
Yn6,300-6,400/t in order to stimulate sales.
In inland China, prices at Lanzhou dropped by Yn100/t
to Yn5,350-5,400/t due to less demand from central China
and limited local demand.

Americas: Mont Belvieu pipeline fob (Jun)


VWA

/USG

100.857

+0.750 100.750 - 101.000 +0.000

101.625

+1.375 101.375 - 101.875 +1.375

Butane

119.500

-0.625 119.250 - 119.750 -0.625

101.086

+0.875 100.750 - 101.500 +0.500

Non-LST

Butane equivalent $/t

Ethane-propane mix

29.375 -0.250

29.000

+0.375

28.750 -

29.250 +0.375

-0.250 127.250 - 127.750 -0.750

Natural gasoline

213.068

212.500 - 214.000

USGC export fob $/t

+3.969 595.218 - 596.524 +3.969

US non-LST averages

/USG
Month to date

Propane (Jun)

102.088

-0.240

Butane (Jun)

123.425

-0.403

US forward market

/USG

Low

High

Mont Belvieu propane


Jun

+0.750 100.750 - 101.000 +0.000

Jul

+0.750 101.000 - 101.500 +0.750

Aug

+0.875 101.625 - 102.125 +0.875

Sep

+1.125 102.625 - 103.125 +1.125

3Q14

+1.000 101.750 - 102.250 +1.000

Mont Belvieu butane


Jun

-0.500 121.500 - 122.000 -0.500

Jul

-0.250 121.750 - 122.250 -0.250

Aug

-0.125 122.125 - 122.625 -0.125

Sep

+1.125 123.125 - 123.625 +1.125

3Q14

+0.875 122.375 - 122.875 +0.875

MtB: Nat gasoline non-Dynergy diff to butane non-LST

130

100

120

90

110

80

100

70

90

60

80

50

70

40

Copyright 2014 Argus Media Ltd

28.750 -

-2.000 212.000 - 217.000 -2.000


127.500

120

06 Jun 14

-0.250

Isobutane

110

08 Apr 14

-0.375 121.250 - 122.375 -0.625


-1.698 549.263 - 554.359 -2.831

29.136

Purity ethane equivalent $/t

140

07 Feb 14

+4.570 526.217 - 530.135 +2.612


121.838

Purity ethane

150

60
09 Dec 13

Targa propane

Butane

Propane LST diff to ethane non-LST

High

Propane

Propane equivalent $/t

Mont Belvieu, Texas, NGL markets ended the week with


mixed sentiment. Trade interest was sparse after a lively
week that shocked market participants with an inventory
build that stood nearly 70pc above the expected build level
of 2.2mn bl.
Propane prices at the LST terminal were mostly rangebound and 37.5pt firmer day-over-day, while non-LST prices
jumped much more significantly by 62.5pt. Meanwhile
ethane prices moved to parity with E/P mix. The two
markets came together to stand flat at 29/USG.
Mont Belvieu heavy markets were also mixed. Butane
markets softened day-over-day in the midst of mixed outside
futures markets. Isobutane prices were down 50pt from
Thursdays average level and trade remained muted for the
majority of the session. While natural gasoline prices spent
most of the day bouncing between the 213-214/USG range,
late session dealings in the afternoon window saw values
soften to the days low of 212.50/USG, bringing the average
price to parity with the prior days level. Natural gasolines
value relative to WTI crude softened 1pt to 87.25pc.
July WTI futures gained 18/bl as it settled the session
at $102.66/bl. The Nymex Rbob futures benchmark moved
in the opposite direction as it dropped to 293.90/USG,
or down 1.73/USG from Thursdays close. Meanwhile the
Henry Hub natural gas July futures contract gained ever so
slightly by 70pt to settle at $4.679/mnBtu.

/USG
Low

LST

Propane

US

30
09 Dec 13

Page 7 of 11

07 Feb 14

08 Apr 14

/USG

06 Jun 14

Argus International LPG

Issue 14111 | Friday 06 June 2014

LST propane opened the session priced at 100.875/


USG, and maintained that average price throughout the
session, reflecting a 37.5pt firming day-over-day. One
major rolled 500,000 bl of June LST propane to July to
collect 0.25/USG as the prior sessions flat forward curve
steepened to a 25pt contango. Outer month activity saw
fourth quarter barrels priced at 104/USG, while a 2015
January/February trade valued the forward month at a
62.5pt backwardation. Calendar 2015 propane was done at
102.625/USG.
At the non-LST propane hub, markets opened at parity
with LST but deviated as the day matured. Values climbed
to a high of 101.50/USG, but the session was capped
with a trade done at 101/USG. The prior sessions flat
relationship against LST prices diverged as non-LST propane
carried on average a 50pt premium to concurrent LST
materials. The June/July curves flat structure moved to a
0.50/USG contango.
At Hattiesburg, Mississippi, 5,000 bl of propane changed
hands at 101.375/USG.
As propane hubs separated, ethane values converged
with E/P mix prices. One lone outright E/P mix deal was
done at midday at 29.25/USG. Within moments purity
ethane was spread at flat to mix.
Ethane prices opened 12.5pt below Thursdays midpoint
at 29.25/USG. Values softened to hit a low of 28.75/USG
before an afternoon boost. The market closed at its peak
of 29.375/USG. Meanwhile the prior days 12.5pt contango
steepened to 25pt.
Heavy NGL markets were mixed day-over-day, and
values felt downward pressure as the session progressed.
Natural gasoline markets ended the day flat to the previous
sessions average level.
Non-LST butane kicked off the session priced at
122.25/USG, or 12.5pt lower than Thursdays midpoint.

AMERICAS DEALS
Mont Belvieu spot deals
Timing

/USG

75
70
65
60

45
09 Dec 13

29.250

10

E/P mix non-LST/non-LST ethane


Jun/Jun

0.000

10

Purity ethane non-LST

Copyright 2014 Argus Media Ltd

06 Jun 14

121.625

10

Jun

121.750

10

Jun

121.750

25

Jun

122.000

10

Jun

122.250

10

Jun

122.375

10

10

Jun

28.875

10

Isobutane non-LST

Jun

28.875

10

Jun

Jun

29.000

10

Jun

29.000

10

Natural gasoline non-LST

Jun

29.250

10

Jun

212.500

25

Jun

29.250

10

Jun

212.625

10
25

127.500

10

Jun

29.375

10

Jun

212.625

Jun

29.375

30

Jun

213.000

10

3Q

29.500

15

Jun

213.000

10

Propane LST

Jun

213.000

25

Jun

213.125

10

Jun

100.750

10

Jun

213.250

10

Jun

100.750

25

Jun

213.250

10

Jun

100.875

10

Jun

213.500

10

Jun

100.875

10

Jun

213.750

10

Jun

100.875

10

Jun

213.875

10

Jun

100.875

10

Jun

214.000

10

Jun

100.875

10

Jul

212.500

10

Jun

100.875

75

Jun

101.000

10

Mont Belvieu natural gasoline Targa

4Q

104.000

75

Jun

Cal Year

102.625

84

217.750

10

Butane non-LST/non-LST butane


Propane non-LST
100.750

10

Jun

100.875

10

Jun

100.875

Jun

0.250

15

1Q

-4.250

150

Ethane non-LST/non-LST ethane

Jun

101.000

10

Jun

101.000

10

Jun

101.250

25

Propane LST/LST propane

Jun

101.500

10

Jan/Feb

-0.625

100

Jul

101.250

25

2Q/3Q

-1.000

30

0.500

10

Jun/Jul

0.250

500

0.000

Jun

Page 8 of 11

121.250

Jun/Jul

0.250

25

Targa/non-LST propane
10

Normal butane non-LST

08 Apr 14

Jun

28.750

Jun/Jun

07 Feb 14

000 bl

Jun

Propane non-LST/LST propane

50

/USG

Normal butane non-LST (cont.)

Jun

Jun/Jul

55

Timing

000 bl

E/P mix non-LST

Jun

Butane Mt Belvieu non-LST current month ratio to WTI

/USG

Jun/Jun

-0.500

10

Nat gas non-LST/non-LST Nat Gas


10

Jun/Jul

-0.875

50

Argus International LPG

Issue 14111 | Friday 06 June 2014

The market peaked at 122.375/USG and shed 1.125/


USG to hit its session low of 121.25/USG. Average values
declined 62.5pt session-over-session. The LST marketplace
maintained a 2.25/USG discount relative to non-LST.
Meanwhile the two hubs saw a flat forward curve move to a
0.25/USG contango.
Isobutane at the non-LST hub changed hands at 127.50/
USG, or 50pt below the last sessions midpoint. After the
deal was done early in the session, bids and offers diverged
as far as 2/USG apart. July values firmed 25pt relative to
June.
Natural gasoline markets ended the day at parity
with the last sessions average value. While prices were
relatively strong throughout the session, the end of the day
saw a turn that priced the marketplace 1.50/USG below
the high trade of the day.
The non-LST natural gasoline marketplace opened at
213/USG, or 25pt below the last average price. After
hitting a high of 214/USG, values were jolted back and
forth in choppy trade with little clear direction. The
forward curve was also held unchanged as it was pegged at
a 75pt backwardation.

LATIN AMERICA
On Friday the VLGC Morston finished loading at Targas
Galena Park export terminal and began its journey to
South America. The vessel is moving to Suape, Brazil, and
potentially Santos as well. It is due to land at Suape on 18
June for an NOC.
The Navigator Mars was also finished loading at Targa.
The handy-sized vessel will sail to Omoa, Honduras.
At Enterprises Houston Ship Channel export hub, the
Clipper Victory returned from Chile. The VLGC loaded
alongside another VLGC, the BW Lord, which is expected to
sail to the Caribbean.

ANNOUNCEMENT
Argus Africa LPG 2014
16-17 September | Cape Town, South Africa
Register online and save US $155 with our early bird
discount. Offer ends 25 July 2014. For more information,
please visit our website www.argusmedia.com/africa-lpg

INDUSTRY NEWS
Australias April LPG exports fall
Australias April exports of LPG fell 46pc from a month
earlier to 94,793t to a four-month low because of a sharp
decline in propane and butane shipments to Japan.
Propane shipments dropped 40pc to 44,063t in April, its
lowest level since January, according to Australian Bureau
of Statistics (ABS) data. Propane shipments to Japan eased
to 21,000t in April from 48,000t in March. South Korea
bought 22,000t, unchanged from the previous month.
Butane exports fell 35pc to 50,700t in April, as exports
to Japan fell to 23,500t from 78,500t in March that had
been the highest level in more than two years.
Australias LPG exports generated A$88.43mn in export
earnings, or $82.36mn based on the average exchange rate
used by the ABS in April of A$1/$0.9314. This equates to an
average price of $868.85/t.

Rhine barge costs to remain up next week


Freight costs for refined products, petrochemicals and coal
barges on the river Rhine are set to rise further into next
week as water levels continue to fall.
Water levels at the key measuring point of Kaub fell by
5cm from yesterdays levels to 170cm by 05:00 local time

Copyright 2014 Argus Media Ltd

this morning, and are forecast to drop as low as 134cm by


the morning of 10 June.
Water levels at Kaub need to be above 180cm to allow
barges to load to their full capacity. Once the waters fall
below that level a surcharge of 10pc of the freight cost is
added for every 10cm drop to compensate vessel owners for
lost revenues caused by barges sailing partially loaded.

Moerdijk blast keeps styrene prices high


An explosion at the SMPO-2 petrochemical unit at Shells
Moerdijk site overnight on 3-4 June has led to a force
majeure on German chemicals producer BASFs propylene
Argus Assessment Rationale Database
For prices used in financial benchmarks, Argus publishes
daily explanations of the assessment rationale with
supporting data. This information is available to permissioned subscribers and other stakeholders.
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Page 9 of 11

Argus International LPG

Issue 14111 | Friday 06 June 2014

oxide supply, and expectations of higher styrene prices and


a tighter supply in the near future.
By the close of trading today, June and Julys prices
were above the $1,610/t mark, up by around $70/t
compared with 3 June, having initially jumped by around
$55/t on 4 June.
SMPO-2 is equally owned by the Shell-BASF Ellba joint
venture and has a capacity of 550,000 t/yr of styrene.
Total western European styrene capacity for 2014 is around
5.4mn t.
BASF has yet to issue a statement on its styrene supply
chain. But Styrolution a styrenics producer owned jointly
by BASF and UK petrochemical producer Ineos said it was
investigating the cause of the explosion.
Shell has a second wholly-owned styrene and propylene
oxide unit in Moerdijk the 460,000 t/yr SMPO-1 which
was unaffected by the fire. Ethyl benzene used to feed
the units is supplied from within the Shell system and by
BASF from its Antwerp site.
Part of BASFs 890,000 t/yr ethyl benzene plant in
Antwerp is used to feed BASFs needs for the Ellba unit in
Moerdijk. Styrene from BASFs share of the Ellba plant is
sold to Styrolution as part of a 2011 deal that established
Styrolution as an independent entity outside the BASF
group. It is not known how long the SMPO-2 unit will be
out of operation, but is likely to last months rather than
weeks. Benzene demand for ethyl benzene to feed the unit
is around 35,000 t/month, split equally between BASF and
Shell.

Senate bill includes propane pricing plan


The US Senate Appropriations Committee yesterday passed
appropriations legislation that includes provisions for public
propane pricing education.
Senate energy Committee chairwoman Mary Landrieu
(D-Louisiana) included the provisions in the final bill. The
committee approved the FY15 Commerce, Justice and
Science Appropriations bill by a vote of 30-0, and approved
the FY15 Transportation, Housing and Urban Development
(THUD) Appropriations bill by a vote of 29-1.
Senate majority leader Harry Reid (D-Nevada) is
expected to move on appropriations bills, including those
passed yesterday, later this summer.
Landrieu included an amendment meant to unlock
Commerce Department funds directed at public outreach
once the price of propane gas rises beyond a certain level.
Under existing law, the Commerce Department annually

Copyright 2014 Argus Media Ltd

calculates the price of consumer propane annually and


compares that price to an index of competing fuels. If the
propane price is more than 10.1pc of that index price, the
Commerce Department restricts funding to the Propane
Education and Research Councils (PERC) educational
outreach budget. PERC is a federally-mandated propane
safety organization. The Commerce Department is also
required to update its propane price every 180 days, but
Landrieu said that calculation has not been completed since
February 2012.
Landrieus amendment directs the Commerce
Department to use propane pricing data available from the
Energy Information Agency to determine whether propane
prices have fallen below the 10.1pc threshold, unlocking
the PERC educational funds.
Landrieu said last winters propane price spike could
have been mitigated by consumers filling their propane
tanks for home heating earlier in the season. Landrieu said
the amendment will allow PERC to reach out to consumers
and warn them ahead of time to be prepared and not wait
to fill their tanks.

Canyon Midstream pens Permian deals


Canyon Midstream has reached agreements with ExxonMobil
subsidiary XTO Energy and US independent Apache for
capacity on its planned James Lake natural gas gathering
system in west Texas Permian basin.
The company declined to give the details of those
agreements but a spokesman said that XTO and Apache
would represent a significant part of the capacity at its
100mn cf/d James Lake gas processing plant in Ector
County, Texas.
The plant and other parts of the James Lake system
which includes 60 miles (97km) of 12-inch diameter
pipeline and six compressor stations is scheduled to begin
operations late this year. It will provide gas into the El Paso
natural gas pipeline and NGLs to the Chaparral and Sand
Hills pipelines.
The system will serve the Texas counties of Ector,
Andrews, Martin, Dawson and Gaines. Those counties sit
atop the Permian basin, an oil- and gas-rich formation
underlying west Texas and southeastern New Mexico.
Canyon Midstream is planning a second phase of the
James Lake system that will add another 100mn cf/d
processing plant and 60 more miles of 12-inch pipeline,
expanding the system into the Texas counties of Howard
and Borden by the second half of 2015, the company said.

Page 10 of 11

Issue 14111 | Friday 06 June 2014

Argus International LPG

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Propane cif ARA Calculator
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Argus also now produces a daily large cargo propane cif ARA calculator file.
This shows how Argus uses the various inputs including swap and physical
deals to establish the daily price. This is also available at the link above.
For details of your password and login information, please contact:
sales@argusmedia.com or contact your local office www.argusmedia.com/
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