Summary
The US LPG market has seen a strong start to the year amid colder-than-expected weather. A rally in natural gas futures following Christmas lent support to LPG, with the Feb’25 Mont Belvieu TET propane (C3 LST) rising from under 80c/gal on 30 Dec to 92.375c/gal on 15 Dec (at the time of writing). Severe weather forecasts continue to loom over the US Eastern and Southern coasts amid an anticipated blast of Arctic air in the coming week. Flow-wise, the Feb’25 contract has seen 200kb of end-user buying, and while trade houses were seen selling the flat price contract, they bought 430kb of the Feb/Mar’25 spread from Onyx this month. US propane inventories have fallen below 80mb as of the week ending 10 Jan for the first time since July 2024. The week ending 3 Jan recorded a 2.4mb draw, while the following week saw inventories decline by 4.7mb. Additionally, US normal-butane (non-TET) has also seen a surge in support in line with propane strength, although we have seen trade houses and banks selling 65kb of the Feb/Mar’25 n-butane spread from Onyx this week.
