LPG Flows from Gulf Coast To NWE Expected to Rise
Flows of LPG from the U.S. Gulf Coast to Northwest Europe (NWE) are expected to rise in May, with three VLGCs and one handysize vessel seen arriving in the first week of the month alone, according to data from S&P Global Platts. The 49,999-deadweight-ton (DWT) Yushan is expected to arrive in Flushing in the Netherlands from Houston early this month. In addition, the 53,658-DWT Levant is to arrive from Freeport, Texas; the 51,700-DWT Gas Summit is scheduled to arrive from Houston; and the 23,640-DWT Navigator Pegasus is to arrive in Flushing from Houston, implying a sharp uptick in overall arrivals from April. As a result, notes S&P Global Platts, there is been a swift drop in the large spot propane cif (cost, insurance, freight) cargo…
Flows of LPG from the U.S. Gulf Coast to Northwest Europe (NWE) are expected to rise in May, with three VLGCs and one handysize vessel seen arriving in the first week of the month alone, according to data from S&P Global Platts. The 49,999-deadweight-ton (DWT) Yushan is expected to arrive in Flushing in the Netherlands from Houston early this month. In addition, the 53,658-DWT Levant is to arrive from Freeport, Texas; the 51,700-DWT Gas Summit is scheduled to arrive from Houston; and the 23,640-DWT Navigator Pegasus is to arrive in Flushing from Houston, implying a sharp uptick in overall arrivals from April.
As a result, notes S&P Global Platts, there is been a swift drop in the large spot propane cif (cost, insurance, freight) cargo market, which fell from large premiums in April to modest discounts for cargos lifting in the first half of May. However, the swift pace at the front of the month may actually slow later in the month, a source said. “I think May could be one of those months where we have a little bit of length on the supply side at the start of the month, and it fades a bit as we come to the second half of the month.”
The source added that prices in Asia were still pulling product east from the U.S. at the expense of incoming product in Europe. The strong May outlook follows a relatively robust April, on the back of expectations that incoming supply would be much lower than March. April saw an expected total of about 170,000 metric tons leaving the U.S. Gulf Coast, with an additional VLGC, the BW Loyalty, arriving in the NWE region from Marcus Hook.
April arrivals, which included the Lycaste Peace, the Commander, the Libramont, the Navigator Aurora, and the Ocean Orchid, ultimately brought April just slightly below March in total volumes, although expected tightness on arrivals helped the spot market keep hefty premiums throughout the month against the paper market. VLGCs crossing the Atlantic from the U.S. Gulf Coast to Northwest Europe usually serve the propane market in the region, where product is used for inland heating during the winter and as a petrochemical feedstock.
(SOURCE: The Weekly Propane Newsletter, May 7, 2018)
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