The LPG market is currently in a period of transition; adapting to an environment of increasing supply, growing importance of the petrochemical markets, lower global price spreads and depressed freight rates.
Supply has increased in the last few years from both the US, as a result of Shale Gas exploration, as well as from the Middle East as players maintain global market share and production projects come to fruition.
In terms of propane demand, Asia remains a key output for trade volumes driven mainly by the onset of new PDH facilities, particularly in China and Korea. Furthermore, the narrowing of the spread has resulted in arbitrage economics becoming unfavourable creating a challenging trading environment.
At the same time, the VLGC fleet has increased substantially, depressing freight rates to levels around or below OPEX costs. Combined with the decreasing price spread between the US and Asia, the oversupply of VLGCs on a ton-mile basis has forced many market players to realign their positions in the current market.
Gathering key commercial players from Asia, Europe, US and the Middle East, CMT’s 12 LPGtrade Summit is a NOT TO BE MISSED event for all who are involved in the global LPG trade (production, procurement, trade and etc). Register NOW to attend with your team, to enjoy attractive early bird group discounts. Contact firstname.lastname@example.org today!