April LPG exports from the US to Northwest Europe, the Mediterranean and North Africa stood at 762,800 mt April 19, down from 1.1 million mt in March, according to data from S&P Global Commodities at Sea.
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Register NowVolumes were predominantly headed to the Netherlands (298,000 mt), Morocco (163,000 mt), Belgium (66,300 mt), Turkey (93,100 mt), and Egypt (97,700 mt), the data showed.
Of the total, propane accounted for 568,800 mt, while butane totaled 194,000 mt.
Platts, part of S&P Global Commodity Insights, assessed FOB US Gulf Coast propane cargoes at $442.64/mt April 18, down $4.59 on the day, and CIF NWE large propane cargoes at $506.75/mt, down $9. CFR South China propane was assessed at $623/mt April 19, up $1 day on day.
Platts assessed FOB US Gulf Coast butane at $417.33/mt, down $4.59 on the day, while CIF NWE large butane cargoes fell $12.75 to $492/mt April 18. CFR North Asia butane strengthened slightly, climbing $1 to be assessed at $614.50/mt April 19.
Shifting arbitrage economics
Arbitrage economics into Europe for propane have remained narrow in recent weeks, with weakness in the European market failing to pull barrels, sources said. Meanwhile, strength in the Asian market has increased flows from the US, while freight rates have remained somewhat balanced.
VLGC rates from Houston to Northwest Europe stood at $65/mt April 18, down $3 on the week, while rates on routes to Morocco fell $2.50 to $61.75/mt, Platts data showed.
VLGC freight rates from Houston to Chiba, Japan, also softened on the week, dipping $5 to $120/mt April 18.
Despite dwindling flows into the European propane market, fundamentals continue to be in equilibrium as supply remains plentiful for quieter downstream demand, players added.
On the butane front, arbitrage economics have turned more favorable as weakness in the US complex dampens prices, players added.
"The arbitrage opportunities for butane between Mont Belvieu and Northeast Asia have expanded, driven by declining prices at Mont Belvieu and lower freight costs from Houston to Chiba [in Japan]," according to analysts at S&P Global. "In contrast, butane prices in Asia have remained strong, underpinning robust arbitrage conditions."
"The [butane] arbs are working as well so more inbound cargoes are expected, [it] does seem like there's enough volume in the market," a butane trader said.