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Argus International LPG

Daily international LPG prices and market commentary

Issue 15-167 | Tuesday 25 August 2015

Overview Prices

Asia-Pacific: Spot prices unchanged. Key prices $/t


Bid Ask
Europe: Prices edged lower on both grades.
North America: Propane firms. Propane cif ARA (large cargoes) -3 250 - 260 -3
Butane cif ARA (large cargoes) -4 234 - 244 -3
daf Brest propane 335 - 350
Propane: Mt Belvieu non-LST diff to cif ARA $/t daf Brest propane-butane mix 290 - 320
Propane Argus Middle East Index 282.0 +3.0
-50 Butane Argus Middle East Index 312.0 +3.0
Propane Argus Far East Index (AFEI) 361.0
-75 Butane Argus Far East Index (AFEI) 391.0
Argus Mixed Index 376.0
-100 Americas: Propane Mont Belvieu pipeline fob (Aug) /USG
VWA Low High
-125 Enterprise 36.060 +0.750 35.750 - 36.625 +0.625
LST 35.852 +0.875 35.625 - 36.500 +0.250
-150 USGC export fob $/t +2.074 255.588 - 256.893 +2.074
US propane del Japan (AUSJ) $/t +2.0 445.5 - 447.0 +2.0
-175 US propane del ARA (AUSE) $/t +2.0 330.5 - 332.0 +2.0

International comparisons (Aug) $/t


-200
Propane Butane
26 Feb 15 28 Apr 15 26 Jun 15 25 Aug 15
Argus North Sea Index (ANSI) 293.5 287.5
Sonatrach fob Bethioua 295.0 300.0
Propane: ARA diff to Med, cif $/t
Saudi Aramco 365.0 400.0
KPC (Kuwait) 365.0 400.0
20
Argus Middle East netback 279.0 309.0
15 Argus arbitrage $/t
Propane Mt Belvieu NW Europe AFEI
10
Physical spot 189.00 255.00 361.00
5 Sep 191.25 255.00 361.00
Oct 197.25 264.00 368.00
0 Nov 202.50 272.00 373.00
Regional assessments $/t
-5
Propane NWE diff to Mt Bel AFEI diff to Mt Bel AFEI diff to NWE
-10 Physical spot -66.00 -172.00 -106.00
Sep -63.75 -169.75 -106.00
-15
Oct -66.75 -170.75 -104.00
27 Feb 15 29 Apr 15 29 Jun 15 25 Aug 15
Nov -69.50 -170.50 -101.00
CONTENTS Naphtha

Northwest Europe 2 Bid Ask

Mediterranean, FSU 3 cif northwest Europe -4.75 351.25 - 352.25 -4.75

International swaps 3 cif Mediterranean -4.25 341.75 - 342.75 -4.25


cfr Japan -11.50 387.25 - 388.50 -11.50
Middle East 4
fob Mideast Gulf -10.80 349.80 - 351.05 -10.80
Asia-Pacific 5 LPG freight $/t
US 7 VLGC Mideast Gulf-Japan 40,000-44,000t 82.0
Latin America 10 1,800t Tees-Lisbon butane 85.0
Industry news 10 1,800t Tees-ARA 40.0

Copyright 2015 Argus Media Ltd


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

NORTHWEST EUROPE Northwest Europe and Mediterranean $/t


Bid Ask

Large Cargo Propane


Large cargo propane values fell again to their lowest point cif ARA (large cargoes) -3 250 - 260 -3
since September 2003 as paper values dropped back once fob northwest Europe (small) -3 192 - 202 -3
more and crude remained in the low $40s/bbl. cif ARA (small) -3 232 - 242 -3
There was no activity in the afternoon trading period fob ARA (barge) -5 275 - 285 -5
once again an absence of 11 days, also not seen for several fca ARA (rail) +10 295 - 305 +10
years. The spot large cargo propane market is expected cif Mediterranean (large) -3 247 - 257 -3
to remain quiet until the end of the month when the fob Mediterranean (small) -5 320 - 330 -5
G.Symphony VLGC is still expected on 31 August to cover fca Mediterranean (rail) 290 - 300
two shorts into a petrochemical producer. Some North Propane averages (Aug) Price
Sea cargoes are heard to have gone into a petrochemical cif ARA (large cargo) 292.441 -2.340
producer - the only source of current demand. With Sep- fob ARA barge 321.750 -1.000
tembers arbitrage from the US to northwest Europe looking Butane
closed and crude prices slack there is more talk of potential cif ARA (large cargoes) -4 234 - 244 -3

cancellations for September cargoes from the US. But discus- fob northwest Europe (small) +25 359 - 369 +25

sion has not yet evolved into names or dates and there is cif ARA (small) -3 269 - 279 -3

the likelihood of a stand-off as trading companies wait for fob ARA (barge) 251 - 261

someone else to make the first move. fca ARA (rail) 266 - 276

In the absence of discussion or market activity large cif Mediterranean (large) -4 237 - 247 -4

cargo butane prices remained at 68pc of naphtha on a deliv- fob Mediterranean (small) +10 425 - 435 +10

ered basis. Butane averages (Aug) Price


cif ARA (large cargo) 277.882 -2.431

Coasters fob ARA barge 290.900

The butane fob price continued to ascend, and at pace, de- Ice Brent futures settlement
Oct 43.21 +0.52
spite naphthas retreat as another deal was done. Petredec
Nov 44.06 +0.57
returned after picking up a 1,800t French specification
Dec 44.88 +0.59
butane cargo yesterday from Phillips 66 to bid for the same
volume at an initial $349/t fob Immingham no other port
options were given loading 30 August to 1 September. This
was increased to $364/t over 103pc of naphtha where levels appear to have stabilised and barge availability is less
Phillips 66 came back in to do another deal. critically tight. Fob tonnes were offered at $275/t but there
The fob price is now well above the cif valuation, which were no reports that this had been booked.
edged up to 78pc to naphtha but fell on an outright basis as Slim reports of butane discussion on a fixed price basis
naphtha waned. Another cargo was picked up by a petchem with an offer at around $260/t were unconfirmed but aligned
buyer but no further details were provided, while a normal with previous assessments of delivered butane at around
butane cargo was heard earlier to be on show at a much 76pc of naphtha.
higher naphtha related price without eliciting much inter-
est. There were also some mutterings of nascent blending Reported done ($/t)
demand but brokers suggested these could be premature. 364 fob Immingham (butane coaster, 1,800t, loading 30 Aug-
Propane continues to be in stasis with no discussions and 1 Sep)
prices still moving in tandem with large cargoes. 322 fca ARA (propane railcars, 270t, loading 25-31 end Aug)

ARA Assessment rationale


The fall in prices combined with cooler weather to bring Propane ARA large cargo (PA0000400) was assessed on the
buyers back to the table. Railcars dominated with lots basis of transactions, bids and offers, as and when these
changing hands at as high as $322/t fca ARA, though trade are identified in the market commentary, and other market
also took place at substantially lower levels. Rhine water data, in accordance with the methodology.

Copyright 2015 Argus Media Ltd Page 2 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

Butane ARA/UK large cargo (PA0000360) was assessed on FSU $/t


the basis of transactions, bids and offers, as and when these Bid Ask

are identified in the market commentary, and other market fob Black Sea propane-butane mix 275 - 310
data, in accordance with the methodology. fob Black Sea propane 265 - 305
fob Black Sea butane 285 - 320
MEDITERRANEAN daf Brest propane-butane mix 290 - 320
daf Brest propane-butane mix /t -6 250 - 275 -7

The butane coaster price moved higher again as Petredec daf Brest propane 335 - 350
daf Brest propane /t -7 288 - 301 -8
returned to bid for another 2,500t French specification fob
daf Brest differential to cif ARA (large) 88
Lavera cargo following yesterdays deal. Their first bid was
daf Ukraine propane-butane mix 335 - 350
at $430/t, loading 30 August to 1 September, where they
Argus RBS propane-butane mix index 340 - 362
found a seller almost immediately in the form of Total.
fot Burgas (Lukoil posted) propane-butane mix 540 +10
Supplies now look very thin regionally on butane and more Argus Polish Domestic Index (APDI) 396 +2
buying is expected, and the northwest-European-Med differ-
ential narrowed as Petredec bought another fob Immingham International swap prices $/t
cargo at a $20/t premium. Mid

Propane trading was limited again as values continue to Propane northwest Europe
move in line with northwest Europe. Buyers are seemingly Sep 255.0 -3.0

covered and are waiting till September to return to the fold. Oct 264.0 -3.0
Nov 272.0 -2.0
There was a report of maintenance at Sonatrachs Bethioua
Dec 281.0
from early-September and into the second half of the month,
Jan 282.0 -1.0
which could delay exports, although this is not expected to Feb 277.0 -2.0
have a significant impact on trade. Q4 272.0 -2.0
Q1 275.0 -1.0
FSU Q2 260.0 +2.0
Spot activity on the propane-butane mix market in the Brest Propane CP Middle East
Sep 293.0 +3.0
region was calm leaving prices for cargoes at the Belarus-
Oct 300.0 +4.0
Polish border holding steady.
Nov 306.0 +4.0
Propane daf Brest prices also did not change in a quiet
Argus Far East Index
market. Sep 361.0 -1.0
Propane, butane assessment and propane-butane mix Oct 368.0 -1.0
for fob Black Sea cargoes remained unchanged amid limited Nov 373.0
discussions. Naphtha northwest Europe
Bid Ask

INTERNATIONAL SWAPS Sep -3.0 355.0 - 357.0 -3.0


Oct -1.0 359.0 - 361.0 -1.0
Nov 363.0 - 365.0
September cif ARA waned $3/t to $255/t to mark a $38/t fall
over the last three trading days. The front month traded just
twice at that level during the 4:15-4:30 liquidity session after Butane: AFEI diff to cif Med $/t
yesterdays bumper seven-deal 18,000t batch of September 250

cif ARA paper concluded within the timeframe.


The September propane-naphtha spread is unchanged at 200

$101/t with a $3/t loss posted on either side as the naphtha


swap settled out at $356/t. Spreads in October and Novem- 150
ber each widened $2/t but remain in the double digits at
-$96/t and -$92/t respectively. The front month spread is the 100
sole monthly propane-naphtha spread residing south of the
-$100/t mark through to the year end. And Q1 2016 propane- 50
naphtha is most recently trading at -$92/t
With value across the Mideast market rising marginally, 0
18 Feb 15 22 Apr 15 24 Jun 15 25 Aug 15

Copyright 2015 Argus Media Ltd Page 3 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

AFEI-CP spreads narrowed with the losses exacerbated by Middle East and Asia-Pacific averages $/t
small outright depreciations in prompt Asia-Pacific swaps. Price

The AFEI-CP spread came in $4/t and $5/t respectively in Middle East (Sep)

September and October to settle out at $68/t while Novem- Propane -21.867 +0.562
Butane -21.867 +0.562
ber shed $4/t to $67/t.
Argus Middle East Index
Propane 301.800 -1.4
Reported done ($/t) Butane 330.667 -1.3
255 (2kt x2) Sep cif ARA Argus Far East Index (Aug)
Propane 395.800 -2.486
256, 257 Aug cif ARA
Butane 424.667 -2.404
253, 254, 255 (x2) Sep cif ARA 11+11 propane-butane mix (Aug) 410.233 -2.446
274 Q4 cif ARA
279 Q1 cif ARA Propane: AFEI diff to Mt Belvieu $/t
-4 Q4-Q1 cif ARA
400
-92 Q1 propane-naphtha
295 (x2) Sep CP
350
301 Oct CP
-7, -6 (x2) Sep-Oct CP
300
67 Q4 AFEI-CP

250
MIDDLE EAST
200
Spot fob discounts for September loading cargoes from the
Mideast Gulf were assessed on the basis of VLGC freight
150
netback from September Argus Far East Index (AFEI) paper
23 Feb 15 22 Apr 15 23 Jun 15 25 Aug 15

LPG arbitrage $/t

Northwest Europe NWE differential to AFEI


Mt Bel differential to NWE
Physical spot 255.00 Physical spot -106.00
Physical spot -66.00
Sep 255.00 Sep -106.00
Sep -63.75
Oct 264.00 Oct -104.00
Oct -66.75
Nov 272.00 Nov -101.00
Nov -69.50

Mont Belvieu
AFEI
Physical spot 189.00
Physical spot 361.00
Sep 191.25
Sep 361.00
Oct 197.25
Oct 368.00
Nov 202.50
Nov 373.00

MT Bel differential to AFEI


Physical spot -172.00
Sep -169.75
Oct -170.75
Nov -170.50

Copyright 2015 Argus Media Ltd Page 4 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

swaps which equated to -$14/t against the September CP. Asia-Pacific $/t
VLGC freight rate from Ras Tanura to Chiba were as- CP basis Timing Bid Ask

sessed at $82/t during Asian timestamp in view of a Japa- Propane


nese importer reletting a VLGC to an oil major at low $80s/t Gulf CP fob Sep Sep -1 -19 / -9 -1
on subjects. Argus Middle East Index 282.0 +3.0

The Argus Middle East Index (AMEI) was valued at $282/t Japan CP cfr Sep 1H Oct 63 / 67
Japan cfr 359 - 363
and $312/t for propane and butane respectively for Septem-
Taiwan CP cfr Sep 1H Oct 63 / 67
ber-loading cargoes from the Mideast Gulf.
East China CP cfr Sep 2H Sep 63 / 67
September propane CP swaps were assessed at $296/t
East China cfr 359 - 363
amid a bid-offer range seen at $295-$300/t after a deal was South China CP cfr Sep 2H Sep +69 63 / 67 +69
done at $295/t. South China cfr 359 - 363
Meanwhile, its butane counterpart was assessed at Argus Far East Index (AFEI) 361.0
$326/t, $30/t higher as a bid-offer range was seen for Sep- Butane
tember propane/butane CP swaps at -$34/t against -$29/t. Gulf CP fob Sep Sep -1 -19 / -9 -1
Argus Middle East Index 312.0 +3.0

Asia -Pacific Japan CP cfr Sep 1H Oct 63 / 67


Japan cfr 389 - 393
Taiwan CP cfr Sep 1H Oct 63 / 67
Refrigerated
East China CP cfr Sep 2H Sep 63 / 67
Asian spot prices were flat day-on-day as trading sentiments
East China cfr 389 - 393
improved marginally.
South China CP cfr Sep 2H Sep 63 / 67
The September Argus Far East Index (AFEI) paper swaps South China cfr 389 - 393
were valued at $364/t, down $2/t day-on-day. West coast India CP cfr Sep Sep 58 / 62
An oil major resurfaced to bid for second-half September Argus Far East Index (AFEI) 391.0
arrival 22,000t propane cargoes at September AFEI -$6/t, 11+11 propane-butane mix
equating to $358/t. The bid was a marginal improvement Japan cfr 374 - 378
from yesterdays level of September AFEI -$8/t. South China cfr 374 - 378

A Japanese trader placed a bid for second-half Septem- Argus Mixed Index 376.0
Propane pressurised
ber arrival 22,000t propane cargo at $357/t.
South China CP fob Sep Sep 120 / 130
However, no counter offers nor deals were seen. Pro-
South China fob Sep +4 416 / 426 +4
pane cargoes due for arrival in second-half September from
South China CP cfr Sep Sep 150 / 160
standard and non-standard origins were heard to be still South China cfr Sep +4 446 / 456 +4
available. Vietnam CP cfr Sep Sep 150 / 160
Discussions for October arrival cargoes continued to be Butane pressurised
active. Sellers that have cargoes due for late second-half South China CP fob Sep Sep 120 / 130
September arrival were attempting to sell into first-half South China fob Sep +4 446 / 456 +4
October arrival amid a contango structure between the two South China CP cfr Sep Sep 150 / 160

laycans. South China cfr Sep +4 476 / 486 +4


Vietnam CP cfr Sep Sep 150 / 160

Propane: Saudi Aramco diff to AFEI $/t Butane: Mt Belvieu diff to cif ARA $/t
50 50

0
0

-50
-50
-100
-100
-150

-150
-200

-200 -250
18 Feb 15 22 Apr 15 24 Jun 15 25 Aug 15 26 Feb 15 28 Apr 15 26 Jun 15 25 Aug 15

Copyright 2015 Argus Media Ltd Page 5 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

A US trader posted an offer for first-half October arrival China wholesale propane/butane mix yuan/t
22,000t propane cargo at the average of $370/t and October Bid Ask

AFEI, which equated to $370.5/t. East China


An European trader placed an offer for first-half October Ex terminal
arrival 22,000t propane cargo at October AFEI -$5/t, equat- Ningbo 3,550 - 3,650
ing to $366/t. Wenzhou 3,600 - 3,700
A Russian major placed a bid for first-half October arrival Taicang 3,550 - 3,600 -50

22,000t propane cargo at October AFEI -$10/t, equating to Shanghai -50 3,550 - 3,600 -100

$361/t. Zhangjiagang 3,550 - 3,600 -50

Another European trader offered a second-half October Fujian -100 3,600 - 3,700 -100

arrival 22,000t propane cargo at October CP +$65/t, equat- Ex refinery


Shanghai 3,600 - 3,700
ing to $367/t.
Zhenhai 3,900 - 4,300
Amid a lack of active discussions for evenly-split cargoes,
Yangzi -50 3,600 - 3,650 -50
11,000t+11,000t cargoes were assessed at the average of
Fujian +50 3,500 - 3,550 +50
propane and butane quotes, at $375/t and $378/t for 19-30
Gaoqiao 3,600 - 3,700
September and 1-4 October arrival respectively. The Argus
Qingdao -50 3,400 - 3,500 -50
Mixed index spanning 19 September to 4 October averaged
South China
$376/t basis Japan and south China arrival.
Ex terminal
Zhuhai 3,300 - 3,450
Assessment rationale Shenzhen 3,500 - 3,650 -50
Propane Argus Far East Index (AFEI) (PA0000403) was as- Raoping 3,500 - 3,550
sessed on the basis of bids and offers. Nansha 3,500 - 3,600 -50
September CP and September AFEI swaps were valued at Shantou 3,500 - 3,550
$296/t and $364/t respectively. Yangjiang -50 3,150 - 3,250 -50
October CP and October AFEI swaps were valued at Ex refinery
$302/t and $371/t respectively. Maoming -50 3,150 - 3,200 -50
Cfr propane premiums due for arrival over 19-30 Sep- Guangzhou 3,250 - 3,300
tember were assessed higher day-on-day at -$4/t against the Northeast China ex refinery
September AFEI, equating to $360/t due to a bid for Sep- Daqing 3,550 - 3,650
tember AFEI -$6/t for second-half September arrival 22,000t Dalian 3,300 - 3,400
propane cargoes seen during the trading window session. Northwest China ex refinery

Meanwhile, 22,000t propane cargoes due for arrival over Urumqi 2,950 - 3,050

1-4 October were maintained at October AFEI-$8/t or $363/t Inland China ex refinery

in view of the bid-offer range of October AFEI -$10/t against Lanzhou 2,950 - 3,000
Yan-An -150 3,050 - 3,100 -150
October AFEI -$5/t during the window trading session.

Japan: Butane diff to naphtha $/t Propane LST ratio to Nymex WTI %

50 55

50
25
45
0 40

35
-25
30
-50
25

-75 20
25 Feb 15 24 Apr 15 24 Jun 15 25 Aug 15 02 Mar 15 29 Apr 15 26 Jun 15 25 Aug 15

Copyright 2015 Argus Media Ltd Page 6 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

The propane AFEI spanning across 19 September to 4 Oc- Maoming refinery lowered prices by Yn50/t to Yn3,150-
tober averaged $361/t basis Japan and south China arrival. 3,200/t in a bid to boost sales and Yangjiang CNOOC fol-
The propane AFEI was unchanged from the previous ses- lowed suit and reduced prices by Yn50/t to Yn3,150-3,250/t.
sion. Ex-terminal prices for mixed cargoes in east China fell
Butane Argus Far East Index (AFEI) (PA0000361) was assessed further by Yn50-100/t to Yn3,550-3,700/t owing to crudes
on the basis of other market data. volatility.
Cfr butane prices were maintained at a $30/t premium Yangzi refinery in east China cut prices by Yn50/t to
over propanes whereby cargoes arriving over 19-30 Sep- Yn3,600-3,650/t on the back of rising stockpile levels. But
tember and 1-4 October were valued at $390/t and $393/t Fujian refinery raised prices by Yn50/t to Yn3,500-3,550/t
respectively. The premium stemmed from September owing to dwindling supplies.
propane-butane CP swaps differential maintained at -$30/t In north China, no price changes were seen at Daqing and
day-on-day. Dalian.
The butane AFEI spanning across 19 September to 4 Oc- In inland China, Yanan refinery dropped prices further
tober averaged $391/t basis Japan and south China arrival. by Yn150/t to Yn3,050-3,100/t, mirroring lower prices in
The butane AFEI was unchanged from the previous ses- south China.
sion.
US
Pressurised
Premiums held steady in the Chinese pressurised market Mont Belvieu light NGLs
though outright prices were led higher by a rebound in Sep- Mont Belvieu, Texas, propane strengthened alongside a
tember CP swaps values. rebound in crude prices Tuesday, opening stronger than the
Offers for September-loading cargoes basis fob south prior day and paring gains in moderate activity.
China were notionally assessed at September CP +$130/t LST propane opened at 36.5/USG, 0.25 over the prior
though Chinese terminals preferred to concentrate sales in day's high, and shed 0.875 in trading ahead of weekly inven-
the domestic wholesale market. tory data. It was last traded at 35.625/USG, or at about
In Vietnam, offers for September arrival cargoes were 38.06pc of WTI.
assessed at September CP +$160/t cfr Haiphong but spot The US Energy Information Administration (EIA) is ex-
demand remained dismal. pected to report a 1.3mn bl build in propane inventories
Chinese domestic prices faltered amid mounting bearish on Wednesday, with forecasts calling for a build between
sentiment. 700,000 bl and 1.8mn bl.
Ex-terminal prices in south China moved lower. Prices for
mixed cargoes at Shenzhen and Nansha fell by 50yuan/t to
Yn3,500-3,650/t owing to limited buying interest.
A 22,000t refrigerated cargo arrived into south China
on Monday while another two refrigerated cargoes which
Argus European LPG
totalled 47,000t were expected to arrive into south China on Markets 2015
Tuesday.
24-25 November | London
Save the date for the premier
Argus extends and completes LPG conference in Europe.
second annual Iosco assurance review
Argus has now completed its second external 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 bench-
mark prices is required on an annual basis by internation-
al regulators in order to satisfy Ioscos Principles for Oil
LPG/NGL Market Reporting
Price Reporting Agencies (the PRA Principles). For more
illuminating the markets Consulting
information and to download the report visit our website
www.argusmedia.com/Euro-LPG Events
http://www.argusmedia.com/About-Argus/How-We-Work

Copyright 2015 Argus Media Ltd Page 7 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

At the EPC terminal, propane opened stronger at Americas: Mont Belvieu pipeline fob (Aug) /USG
36.625/USG and eased to 35.75/USG in thin trading. VWA Low High

Location spreads between the two terminals were Enterprise


sparse, with EPC propane trading at a 0.375-0.5 premium Propane 36.060 +0.750 35.750 - 36.625 +0.625

to LST. Propane equivalent $/t +3.917 186.722 - 191.292 +3.264

Targa propane opened traded at 36/USG, and fell to USGC export fob $/t +2.074 255.588 - 256.893 +2.074
Butane 49.419 +0.000 48.750 - 50.250 +0.625
35.875/USG. Location spreads with the LST terminal priced
Butane equivalent $/t +0.000 220.838 - 227.633 +2.832
Targa barrels at a 0.25 premium, while a spread with the
Purity ethane 18.918 +0.250 18.750 - 19.250 +0.250
EPC terminal priced Targa at a 0.125 discount.
Purity ethane equivalent $/t +1.000 138.000 - 142.000 +2.000
Outer-month propane activity was thin. LST August/Sep- Ethane-propane mix 17.500 +0.000 17.250 - 17.750 +0.375
tember spreads traded at a 1 carry. Isobutane 49.500 +0.000 49.125 - 50.250 +0.625
EPC ethane strengthened in choppy trading, opening at Natural gasoline 79.371 79.000 - 82.500 -2.500
18.75/USG, at parity with Mondays midpoint, and rising as LST
high as 19.25/USG before paring gains to end the day valued Propane 35.852 +0.875 35.625 - 36.500 +0.250
at 18.875/USG. Butane 48.625 +0.250 48.375 - 48.875 +0.250

Ethane borrowed upward momentum from gains in both Targa

natural gas and propane, ending the session at a stronger Propane 35.938 +0.375 35.875 - 36.000
Ethane 20.000 +0.750 19.750 - 20.250 +0.750
1.185 premium to natural gas.
A spread with Targa ethane priced EPC ethane at a 1
US Enterprise averages /USG
discount, while an outright Targa volume traded at 19.75/
Month to date
USG.
Propane (Aug) 37.210 -0.063
E/P mix saw no trading Tuesday.
Butane (Aug) 51.235 -0.109
Nymex light, sweet crude futures firmed by $1.07/bl to
$39.31/bl. Nymex RBOB futures continued to fall on Tuesday,
US forward market /USG
ending the session 3.24/USG weaker, at $1.4386/USG, and
Low High
Henry Hub natural gas rose by 3.5/mnBtu to $2.685mnBtu.
Mont Belvieu propane
Aug -0.125 35.375 - 35.875 -0.125
Assessment rationale
Sep -0.125 36.375 - 36.875 -0.125
A minimum of two Mont Belvieu EPC propane deals matching
Oct -0.250 37.500 - 38.000 -0.250
volume requirements set forth by Argus methodology were Nov -0.375 38.500 - 39.000 -0.375
validated and the low/high range for the day was assessed 4Q15 -0.375 38.500 - 39.000 -0.375
based on those values. The minimum aggregate volume of Mont Belvieu butane
deals was also met to calculate the volume weighted aver- Aug 49.000 - 49.500 +0.000
age for the Mont Belvieu EPC propane current any month Sep -0.500 48.875 - 49.375 -0.500
assessments. Oct -0.500 49.625 - 50.125 -0.500

A minimum of two Mont Belvieu LST propane deals Nov -0.500 50.250 - 50.750 -0.500
4Q15 -0.500 50.250 - 50.750 -0.500
matching volume requirements set forth by Argus methodol-

Propane LST diff to ethane non-LST /USG MtB: Nat gasoline diff to butane non-LST /USG

50 90

45 80
40
70
35
60
30
50
25
40
20

15 30

10 20
02 Mar 15 29 Apr 15 26 Jun 15 25 Aug 15 02 Mar 15 29 Apr 15 26 Jun 15 25 Aug 15

Copyright 2015 Argus Media Ltd Page 8 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

ogy were validated and the low/high range for the day was AMERICAS DEALS
assessed based on those values. The minimum aggregate vol-
ume of deals was also met to calculate the volume weighted Mont Belvieu spot deals
average for the Mont Belvieu LST propane current any month Timing /USG bl
assessments.
Butane EPC Aug 48.750 10,000
Aug 49.000 10,000
Mont Belvieu heavy NGLs Aug 49.000 10,000
Mont Belvieu, Texas, natural gasoline extended the previous Aug 49.125 10,000
days losses, borrowing weaker sentiment from declines in Aug 49.125 10,000
RBOB. Aug 49.250 15,000
EPC natural gasoline opened at 82.5/USG, 0.5 stronger Aug 49.250 10,000
Aug 49.250 10,000
than the previous sessions midpoint, and fell to 79/USG in
Aug 49.375 10,000
intraday trade. It was the second day of 79/USG levels, the
Aug 49.500 10,000
lowest values seen since 2009. Aug 49.625 10,000
Natural gasoline managed to lag steep declines in RBOB, Aug 49.750 10,000
ending the day valued 54.91pc of gasoline futures. Aug 49.875 10,000
September EPC natural gasoline volumes traded at 79.75- Aug 50.250 10,000

81.5/USG. Aug 50.250 10,000


Aug/Sep -0.500 100,000
LST and Targa natural gasoline markets were illiquid
Aug/Sep -0.375 30,000
on Tuesday ahead of the release of the Energy Information
Aug/Sep -0.375 20,000
Administrations (EIA) crude and gasoline inventory reports Butane EPC/Natgaso EPC Aug -31.000 10,000
on Wednesday. Ethane EPC Aug 18.750 10,000
A spread with EPC butane priced EPC natural gasoline at Aug 18.750 10,000
a 31 premium. Aug 18.875 15,000

Butane at Mont Belvieu opened higher and fell, ending Aug 18.875 10,000
Aug 18.875 10,000
the day slightly firmer than the prior session, on stronger
Aug 18.875 10,000
sentiment from crude.
Aug 18.875 10,000
EPC butane opened at 50.25/USG, 0.625 stronger Aug 19.000 10,000
than the previous days high, and fell as low as 48.75/USG Aug 19.000 10,000
midday before rebounding to 49.25/USG in the afternoon. Aug 19.000 10,000
Butane was last discussed at a 52.62pc of WTI, weaker than Aug 19.250 10,000

the previous sessions value. Aug/Oct -0.250 150,000


Ethane Targa Aug 19.750 10,000
August/September butane spreads traded at a 0.375-0.5
Ethane Targa/EPC Aug 1.000 10,000
carry.
Isobutane EPC Aug 49.125 10,000
EPC isobutane opened at 50.25/USG and fell to 49.125/ Aug 49.250 10,000
USG in early trading. The remainder of the session was Aug 49.250 10,000
quiet, but spreads with normal butane priced isobutane at a Aug 49.625 10,000
0.125 premium. Aug 50.250 10,000
Isobutane EPC/Butane EPC Aug 0.125 10,000
Aug 0.125 10,000
Assessment rationale
A minimum of two butane Mont Belvieu deals matching
volume requirements set forth by Argus methodology were
validated and the low/high range for the day was assessed to EPC butane, unchanged from the previous sessions dif-
based on those values. The minimum aggregate volume of ferential, and was used in the absence of outright trades. A
deals was also met to calculate the volume weighted aver- polling of market participants did not yield any fresh price
age for Mont Belvieu EPC butane current any month assess- indications for the grade. The minimum aggregate volume
ments. traded did not meet the volume weighted average method-
Mont Belvieu LST refinery grade butane was assessed ology. A minimum of two natural gasoline Mont Belvieu deals
using a midpoint of 48.625/USG. The traded range was as- matching volume requirements set forth by Argus methodol-
sessed by pricing LST butanes midpoint at a 0.875 discount ogy were validated and the low/high range for the day was

Copyright 2015 Argus Media Ltd Page 9 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

AMERICAS DEALS

Mont Belvieu spot deals Mont Belvieu spot deals

Timing /USG bl Timing /USG bl

Natgaso EPC Aug 79.000 25,000 Propane EPC Aug 35.750 10,000
Aug 79.000 25,000 Aug 35.875 5,000
Aug 79.000 25,000 Aug 35.875 5,000
Aug 79.000 25,000 Aug 36.000 40,000
Aug 79.000 10,000 Aug 36.000 10,000
Aug 79.000 10,000 Aug 36.000 10,000
Aug 79.000 10,000 Aug 36.000 5,000
Aug 79.250 5,000 Aug 36.125 10,000
Aug 79.750 10,000 Aug 36.125 10,000
Aug 80.750 10,000 Aug 36.250 10,000
Aug 82.500 10,000 Aug 36.625 10,000
Sep 79.750 10,000 Propane LST Aug 35.500 5,000
Sep 80.250 5,000 Aug 35.625 10,000
Sep 81.500 10,000 Aug 35.625 10,000
Aug 35.625 10,000
Aug 35.750 10,000
Aug 35.750 10,000
assessed based on those values. The minimum aggregate vol-
Aug 35.750 10,000
ume of deals was also met to calculate the volume weighted Aug 35.875 10,000
average for Mont Belvieu EPC natural gasoline current any Aug 36.000 13,000
month assessments. Aug 36.000 10,000
Aug 36.000 10,000
LATIN AMERICA Aug 36.500 10,000
Aug/Sep -1.000 100,000
Aug/Sep -1.000 100,000
Spot cargo discussions were muted as the arbitrages to both
Aug/Sep -1.000 50,000
Europe and Asia appeared closed on paper. Propane LST/EPC Aug -0.500 20,000
By midday the differential between a propane spot cargo Aug -0.375 10,000
from Houston to northwest Europe stood at roughly $40/t, Aug -0.375 10,000
below estimated freight costs, assuming a US spot cargo Propane Targa Aug 35.875 10,000
price of Mont Belvieu plus 5/USG. Observers said charter- Aug 35.875 10,000
Aug 36.000 10,000
ers for US-Asia fixtures were seeking VLGC freight at levels
Aug 36.000 10,000
near $150/t, which is roughly the same differential between
Propane Targa/EPC Aug -0.125 10,000
propane prices in the two regions. Propane Targa/Propane LST Aug 0.250 10,000
In the US, observers said a Mexican trader secured the Aug 0.250 10,000
VLGC Motivator on a six-month time charter beginning in
November at rates around $2mn per month, but this was not
confirmed. INDUSTRY NEWS
The VLGC Clipper Posh continues to load LPG at the Ned-
erland, Texas terminal. The 18,000t Gaschem Adriatic left Asian propylene slumps amid market turmoil
the Houston Ship Channel. Asian propylene prices have fallen by 12pc this week, as
The 8,000t Kendal is scheduled to load LPG in Houston suppliers are undercutting each other on price to offload
this week for a trader. VLGCs BW Gemini and Al Wukir are cargoes amid the bearish market outlook, affected by falling
slated to load this week in Houston. crude futures and the turmoil in global equity markets.
Further south, the VLGC Karoline N is returning from a Bid-offer levels were at $750-760/t cfr China early today,
ship-to-ship transfer near the Panama Canal and is bound for compared with $850-860/t seen last week. A Japanese trad-
Houston. ing firm sold a cargo at $755/t in morning trading. Offers

Copyright 2015 Argus Media Ltd Page 10 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

then slid to $750/t in the afternoon, with bids retreating to report a 1.3mn bl build in US propane inventories for the
$700-740/t. A deal was possibly done at $740/t but it was week ended 21 August, according to an Argus survey.
not confirmed. The 17 market participants called for a build ranging
Propylene prices last hit $740/t to $570-700/t cfr north- between 700,000 bl to 1.8mn bl. Some observers noted that
east Asia at the end of December 2014 and early January slowdowns in exports last week because of equipment issues
2015 following the last oil price slump. at the Nederland, Texas, export terminal will likely result in
It is within our expectations. A lot of propylene down- a larger build.
stream industries are making huge losses, which is not Propane at the US Gulf coast weakened in intraday trade,
sustainable, said a major Chinese acrylic acid maker. while outright values were slightly higher session-on-session,
Spot availability is abundant from regular sources includ- mirroring movements seen in the crude market.
ing Taiwan, South Korea and Japan, as well as southeast LST propane ended the session valued at 35.625/USG,
Asia, Saudi Arabia and India. Few propylene plants are down 0.875 from its open, while EPC propane softened by
currently affected by maintenance. Asias propylene capac- 0.625 in intraday trade, ending the session last sold at 36/
ity losses are currently at this year's lowest level of 3.8pc USG.
compared with Julys 8.6pc. Conway, Kansas, propane traded between 32-32.625/
New capacity has also boosted supplies. Chinas Yantai USG, at parity with the previous days value.
Wanhua began commercial sales of propylene from its new
750,000 t/yr propane dehydrogenation (PDH) unit on 24 Au- US propylene prices lowest since 2009
gust. The plant started producing on-specification propylene US propylene prices fell to lows not seen since 2009 this
from early last week and is now in the process of raising week as robust production outpaces downstream capacity.
production rates. The current run rate is about 40pc. Downward pressure on propylene prices is likely to
Another two Chinese PDH producers also brought back intensify in the next month as Dow Chemical brings its new
production this week. Shaoxing Sanyuan encountered a 1.7bn lb/yr (750,000 t/yr) propane dehydrogenation PDH unit
power outage at its 450,000 t/yr unit on August but resumed online in September.
operations on 23 August. The plant is currently operating at Refinery grade propylene fell to 16.5/lb yesterday, the
60pc. Oriental Yangzijiang also restarted its 600,000 t/yr lowest level since January 2009, according to Argus DeWitt
PDH plant on 22-23 August after clearing up clogging issues data. The decline is a result of high production from strong
at the facility. The current operating rate is estimated at refinery run rates coupled with weak polymer grade propyl-
about 80pc. ene.
RGP production is likely to remain robust with Gulf coast
Bosporus Strait to close tomorrow for work refinery operating rates nearing 97pc the week ending 14
The Bosporus strait at the northern end of the Turkish straits August, according to the US Energy Information Administra-
will close from 04:00-12:00 local time tomorrow while work tion (EIA). Stocks of non-fuel use propylene totaled 4.528mn
continues to build a third suspension bridge. bl the same week, 13pc above year-ago levels, the EIA said.
All shipping traffic will be suspended. Ships of more than PGP fell to 26.25/lb yesterday with a spot volume for
200m in length are typically restricted to daylight passage
for safety reasons, including all Aframax and Suezmax crude
tankers. Butane: Mt Belvieu non-LST ratio to WTI /USG
Work on the Yavuz Sultan Selim Bridge began in May 70
2013, and non-consecutive closures of 57 days for con-
struction work between March and October this year were 60
announced in March. Tomorrow's closure will be the 28th so
far. 50
The Turkish straits comprise the Dardanelles at the
southern end and the Bosporus strait at the northern end 40
near Istanbul. They are the only means of transit between
the Mediterranean and the Black Sea. 30

US propane stocks expected to rise by 1.3mn bl 20


The Energy Information Administration (EIA) is expected to 02 Mar 15 29 Apr 15 26 Jun 15 25 Aug 15

Copyright 2015 Argus Media Ltd Page 11 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

INDUSTRY NEWS

September delivery sold at that level, the lowest price seen from 4,000t a month earlier. Turkey imported 109,608 t from
since April of 2009. Algeria, largely unchanged from a year earlier, and 5,084 t
High running rates at crackers, with propane and butane from Italy.
favored over ethane as feedstocks continue to boost PGP Imports made up 79 percent of total supplies in the
production levels and add to downward pressure on prices. month, with an additional 80,778 t produced in Turkey.
The addition of Dows PDH unit next month will add Total domestic sales in June were 351,786t, 8.7pc higher
about 4.6mn lb/d of PGP to the current market, setting up than the same month of 2014. Of the total sales, 72pc was
a scenario where propylene prices could continue to decline for use in vehicles.
going forward. Turkey's exports in June included 15,964t of LPG to Swit-
zerland, 2,500t to Tunisia, 1,826t to northern Cyprus, and
US LPG exports to Turkey surge 1,601t to Greece.
US exports of LPG to Turkey surged by nearly 400pc in June,
compared with the first time it appeared in May this year. Enterprise restarts Mont Belvieu MTBE unit
Imports from the US rose to 38,846 t in June from 8,000 Enterprise Products Partners is restarting its BEF unit at
t in May, according to figures released today by the Turk- Mont Belvieu, Texas, this week, according to a filing with the
ish energy market regulator. Two VLGCs, the Kobai and the Texas Commission on Environmental Quality (TCEQ).
Captain Markos arrived in Turkey on around 10 July from the The restart will last through 3 September and will result
US gulf. in flaring of butane, isobutane, propane and propylene. The
The surge in imports from the US came as Ukrainian unit produces MTBE for export.
exports to Turkey declined sharply. Turkish imports from
Ukraine, which fell by 84pc to 4,070 t from 25,920 t a year Bolivia inaugurates gas processing plant
earlier also fell in May. Turkey took 85,217 t from Russia in Bolivia has started up a gas processing plant that will allow
June, little changed from a year earlier. And it took an ad- the country to increase exports of LPG to Paraguay and
ditional 41,592 t from Kazakhstan, up from 32,681t from May. Peru.
Total imports in the month rose by 16.5pc to 307,899 t Bolivian president Evo Morales and his Paraguayan
from 264,373 t in June 2014. counterpart Horacio Cartes held an inauguration ceremony
Turkey also took 23,481t of LPG from Libya, jumping for the $694mn Carlos Villegas Quiroga plant, located in the

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Copyright 2015 Argus Media Ltd Page 12 of 13


Argus International LPG Issue 15-167 | Tuesday 25 August 2015

Gran Chaco province, yesterday. It will have a capacity to


process up to 32mn m/d of natural gas to produce 2,247 t/d Argus Assessment Rationale Database
of LPG, 1,658 b/d of natural gasoline, 3,144 t/d of ethane For prices used in financial benchmarks, Argus publishes
and 1,044 t/d of isopentane. daily explanations of the assessment rationale with
Around 20pc of the plants production will go to the do- supporting data. This information is available to permis-
mestic market while the rest will be exported, Morales said sioned subscribers and other stakeholders.
at the cermemony.
Initially, the plant will operate at lower output, produc- Subscribers to this report via Argus Direct or MyArgus
ing around 500t/d of LPG. may access the database here.
The plant is the latest in the countrys industrialization
ambitions to add value to its gas production, which is largely Other subscribers may request access here or contact us
exported to Brazil and Argentina. by email at sales@argusmedia.com.

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