Summary
The LST/FEI arb witnessed notable weakness in the first week of the fortnight. Prompt prices fell from -$160/mt on Mar 27 to lows of -$186/mt come Apr 02, before retracing to above the -$180/mt mark for the rest of the week.
On the other hand, the May FEI/CP diff saw a significant spike upwards on Apr 01 to $19/mt on the back of a lower than expected April CP settlement price. Prices did stabilise for the rest of the week, gradually coming off to $16.50/mt come Apr 10.
In freight, the BLPG1 saw choppy price action yet ultimately tied to a range of $64-67/mt. The BLPG3 rallied $3 to $123/mt on Apr 03 and continues to move upwards.
Open interest wise, we see the greatest fortnightly increase come from the M1 C3 CP contract which saw a 37% uptick over that period, rising to 14.5mbbls.
In the week to Mar 26, CFTC data showed money managers add to their long positions whilst keeping their shorts unchanged. However, the following week highlighted a rise in speculative long and short positions.
EIA stats for the weeks to Mar 29 and Apr 05 highlighted unexpected draws in US propane and propylene stocks of 354kbbls and 105kbbls, respectively.
News
India’s LPG demand for March equated to 2.612 million mt, representing a 8.6% increase from levels seen a year ago.
Spanish LPG demand displayed weaker numbers for February, totalling 182,000mt down 5.3% year-on-year.
As of Apr 10, China’s PE producers witnessed an 8.07% w-o-w increase in inventory levels, taking stocks to above 530,000mt.
There was disruption at the northern French port of Le Havre, as a tanker crashed into the wharf of the Norgal gas terminal, rupturing a gas pipe at the major LPG site which receives an average of 2.5 million mt of propane and butane annually. Imports into Le Havre have been stopped whilst the jetty is repaired, with disruptions potentially ongoing until October. This places pressure on alternative NWE propane markets, tightening logistics in the inland propane markets.
