NWE imports of US LPG surge in 3Q but winter bearish

Spanish Market: LPG
01/10/24

Downstream demand is unlikely to pick up, with concerns around an oversupplied market also weighing on sentiment, writes Efcharis Sgourou

Northwest Europe's imports of LPG from the US rose sharply in the third quarter as regional demand unexpectedly firmed during the summer off-season. And arrivals are likely to drop this winter, contrary to typical seasonal patterns.

The region imported around 580,000t of US LPG in September, the second-largest monthly volume this year after August's 592,000t, Argus estimates. This lifted arrivals to 1.74mn t during the third quarter, the highest since late 2022 and nearly a third up from 1.34mn t in the second quarter. The increase in import demand came as a result of regional supplies falling significantly during maintenance season in the North Sea, in particular at Norway's Karsto, Kollsness and Nyhamna gas processing plants. Some earlier-than-expected demand for stockbuilding prior to winter then led to prompt buyers on the spot market raising their bids in order to attract US LPG cargoes, in turn bolstering the price of cif Amsterdam-Rotterdam-Antwerp (ARA) propane large cargoes, which rose to their highest against front-month Ice Brent crude in more than a year.

The spread between northwest European propane import prices and northeast Asian equivalents under the Argus Far East Index (AFEI) started to narrow towards the end of the third quarter, with the cif ARA discount reaching a little under $50/t compared with over $100/t in June and May. And although the transatlantic arbitrage was largely shut from July onwards, a few narrow periodic openings allowed European buyers to compete with Asia for US cargoes.

Looking to the fourth quarter, spot buying interest for large cargo deliveries in the first half of October looks relatively firm but downstream demand is likely to remain static rather than picking up as temperatures fall. European ethylene steam cracker demand is also unlikely to grow as although run rates improved over the past few months, they are yet to fully recover from recent lows. Propane has been at a steep discount to naphtha from March until May at below -$150/t, supporting demand from flexible crackers. But it has narrowed significantly since, the spread rising above -$50/t in late August — the tightest since February 2023 — and standing at -$66/t by 25 September, curbing buying interest from the sector. The spread could widen marginally in the final quarter but it may not be able to incentivise more demand.

The Karsto processing plant's return to full operations from late September and most other North Sea works coming to a close, as well as an anticipated light turnaround schedule for the region's refineries, will increase northwest European supply in the fourth quarter and decrease the dependency on imports of US LPG. Concerns the supply might overshoot demand has weighed on spot market sentiment in Europe, with October cif ARA propane swaps standing at $583/t on 24 September, compared with $569.50/t for December paper — an unusual backwardated structure into one of the peak months in terms of demand. The backwardation — prompt prices at a premium to later ones — is less indicative of prompt market bullishness and more a reflection of weak sentiment towards the end of the year.

Heavy Asian stockpiling

Sentiment in Asia-Pacific is also weak, with the AFEI forward structure in backwardation of around $5-7/t between October and December. This is largely a result of heavy stockpiling in Asia during the third quarter that has weighed on paper prices.

Meanwhile, front-month US prices at the US Gulf coast hub of Mont Belvieu have traded at discounts to December prices given concerns over exports during the fourth quarter. The price of US Gulf coast fob cargoes jumped to 25¢/USG premiums to Mont Belvieu prompt prices in September from 12¢/USG in June and 9¢/USG in May, an indication that export terminals are nearing capacity. Planned expansions of some of the key terminals are not due to start up until 2025 and 2026.

NWE imports of US LPG

NWE propane vs Ice Brent crude

NWE, NE Asia propane forward curves

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21/05/25

Mexican GDP outlook dims on tariffs: IMEF

Mexico City, 21 May (Argus) — Mexico's association of finance executives IMEF lowered its 2025 growth forecast for a fourth consecutive month, citing the growing impact of US tariffs on the economy. GDP is now expected to grow just 0.1pc in 2025, according to IMEF's May survey, down from 0.2pc estimates in April, 0.6pc in March and 1pc in February. The number of respondents forecasting a contraction in GDP rose to 16, or 37pc of the sample, from nine in April. While the US has granted some exemptions and discounts for Mexican goods meeting regional content rules, IMEF said the effective tariff rate on Mexican exports remains higher than that for Canada, Brazil, India, Vietnam and others. "We're already seeing the [tariffs'] impacts," said IMEF economic studies director Victor Herrera, adding that May trade data will likely show a sharp drop in Mexican exports to the US. Trade is also being hit by a screwworm outbreak in cattle that led to port closures last week and curtailed beef exports, which account for $1.3bn in annual exports. More automakers could relocate or scale back production in Mexico, Herrera said, after Stellantis confirmed plans to shift some operations to the US and recent reports Nissan may close one or both of its Mexican plants. In response, Mexico this week sent deputy economy minister Luis Rosendo Gutierrez to Tokyo to meet with Mazda, Nissan, Toyota and Honda executives. IMEF cut its 2025 job creation forecast to 200,000 in May from 220,000 in April. Mexico's social security administration IMSS reported only 43,500 new jobs over the past 12 months as of 5 May. Beyond trade, IMEF flagged uncertainty from recent constitutional reforms and the potential for a US tax on remittances as additional risks to growth. The group held its 2025 inflation forecast steady at 3.8pc, despite Mexico's consumer price index rising to 3.93pc in April from 3.80pc in March . IMEF noted concerns about a potential rebound in inflation later this year after the central bank cut its benchmark interest rate by 50 basis points to 9pc on 8 May — the third such cut in 2025. The group now sees the end-2025 rate at 7.75pc, down from 8pc previously. IMEF expects the peso to end the year at Ps20.80/$1, slightly lower than the Ps20.90/$1 forecast in April. The peso recently strengthened to Ps19.34/$1, though Herrera said this reflected dollar weakness more than peso strength. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Japan's Astomos, Toho Gas partner on LPG distribution

20/05/25

Japan's Astomos, Toho Gas partner on LPG distribution

Tokyo, 20 May (Argus) — Japanese LPG importer Astomos and city gas distributor Toho Gas will collaborate on LPG distribution in the country's central Chukyo area to streamline distribution and facility operations. Astomos and Toho Gas' LPG sales arm, Toho Liquefied Gas, signed the agreement on 19 May. The two companies will discuss how to collaborate to strengthen tanker transport from import terminals to customers, as well as the filling of tanks and delivery functions. But specific timelines have not been decided and will be discussed, Astomos said. Toho Liquefied Gas supplies LPG to customers in the Aichi, Gifu, Mie, Shizuoka and Ishikawa prefectures. It owns storage tanks in Nagoya, with its combined propane tank capacity at 2,816t and butane tank capacity at 2,404t. The firms will also discuss how to streamline the use of these tanks, Astomos added. Toho Gas sold 474,000t of LPG in the 2024-25 fiscal year ending on 31 March, up by 1.9pc on the year, according to the firm's latest financial results. Most of this was sold by Toho Liquefied Gas. Astomos has separately partnered with fellow importer Gyxis to distribute LPG in the central Chukyo area this year, after closing one of two storage facilities in Aichi prefecture owned by Idemitsu, a shareholder in both firms. The firms will jointly use the Idemitsu Aichi LPG storage facility with a capacity of 105,000t for propane and 76,000t for butane. Astomos has also collaborated with Japan Gas Energy for LPG sales in the central Toyama prefecture since April 2024. There has been greater consolidation of business among Japanese LPG distributors because of declining domestic LPG demand resulting from a falling population, global decarbonisation initiatives including improved energy efficiency, as well as ageing LPG storages which incur maintenance costs. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump says US will soon set new tariff rates

16/05/25

Trump says US will soon set new tariff rates

Washington, 16 May (Argus) — The US will unilaterally set new tariff rates on imports from select trading partners instead of holding negotiations over import tax levels, President Donald Trump said today. In the next 2-3 weeks "we'll be telling people what they will be paying to do business in the US," Trump told a group of US and UAE business executives in Abu Dhabi today. Trump contended that more than 150 US trading partners have expressed interest in negotiating with his administration, adding that "you're not able to see that many countries." Trump's administration since 5 April imposed a 10pc baseline tariff on imports from nearly every US trading partner — with the notable exception of Canada, Mexico and Russia. Trump paused his so-called "reciprocal tariffs" until 8 July, nominally to give his administration time to negotiate with foreign countries subject to those punitive rates. The reciprocal tariffs would have added another 10pc on top of his baseline tariff for imports from the EU, while the cumulative rate would have been as high as 69pc on imports from Vietnam. Trump in April suggested that 200 deals with foreign trade partners were in the works. Treasury secretary Scott Bessent has said the US is only negotiating with the top 18 trading partners. The trade "deals" clinched by the Trump administration so far merely set out terms of negotiations for agreements to be negotiated at a later date. The US-UK preliminary deal would keep the US tariff rate on imports from the UK at 10pc, while providing a quota for UK-manufactured cars and, possibly, for steel and aluminum. The US-UK document, concluded on 9 May, explicitly states that it "does not constitute a legally binding agreement." The US-China understanding, reached on 12 May, went further by rolling back some of the punitive tariff rates but left larger trade issues to be resolved at a later date. The Trump administration would keep in place a 20pc extra tariff imposed on imports from China in February-March and a 10pc baseline reciprocal tariff imposed in April. The US will pause its additional 24pc reciprocal tariff on imports from China until 10 August. Conversely, China will keep in place tariffs of 10-15pc on US energy commodity imports that it imposed on 4 February, and 10-15pc tariffs on US agricultural imports, imposed in March. It will maintain a 10pc tariff on all imports from the US that was imposed in April, but will pause an additional 24pc tariff on all US imports until 10 August. These rates are on top of baseline import tariffs that the US and China were charging before January 2025. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

France consults on expanded biofuels mandate

15/05/25

France consults on expanded biofuels mandate

London, 15 May (Argus) — France has opened consultation on the transposition of part of the recast renewable energy directive (RED III) into national law, which would replace the current system with a new one called "incentive for the reduction of the carbon intensity of fuels" (IRICC). The proposal introduces two separate sets of requirements for transport fuels. The first is for greenhouse gas (GHG) emissions reductions, broken down by transport sectors — road, aviation, maritime, LPG and natural gas for vehicles, which could be CNG or LNG (see table). In the current draft, the GHG reduction target for the road sector will start at 5.9pc in 2026, rising to 10.6pc in 2030 and 18.7pc in 2035. For aviation, the target starts at 2.5pc in 2026, rising to 5.8pc in 2030 and 18.8pc in 2035. The GHG mandate levels include a gradual phasing-in of new fuel sectors – river and maritime fuels, fuel gasses, and aviation. To meet the overall RED III target of 14.5pc emissions reduction by 2030, the national French target includes the biofuels mandates, a share for rail transport, and a share or private vehicle charging. The second set of requirements is a renewable fuel requirement by energy content, which is broken down by fuel type — diesel, gasoline, LPG and natural gas fuels and marine fuel (see table). The blending requirements for diesel start at 9pc in 2026, rising to 11.4pc in 2030 and 16pc in 2035. For gasoline, the mandates start at 9.5pc in 2026, rising to 10.5pc in 2030 and 14.5pc in 2035. Finally, the proposal includes a set of sub-mandates for advanced fuels and renewable hydrogen . The advanced biofuels mandate would start at 0.7pc in 2026, rising to 1.95pc in 2030 and 2.6pc in 2035. Users of renewable fuels of non-biological origin (RFNBOs) would not be subject to the advanced sub-mandate. In feedstock restrictions, the crop cap will rise to 7pc from 6.2pc in 2030 and 2035, while the limit for fuels made from feedstocks found in Annex IX-B of RED will be at 0.6pc in 2026, 0.7pc in 2030 and 1pc in 2035 for diesel and petrol. Aviation fuel will not have a IX-B cap until 2030, and from then it will be 6pc. Mandate compliance would be managed by a certificate system through the CarbuRe registry, with a compliance deadline of 1 March the following year. Public electric vehicle charging would also generate tickets, although the amount of tickets generated by charging light passenger vehicles would be reduced from 2031 to reach 50pc in 2035. Renewable hydrogen used in transport would also generate tickets counting towards the hydrogen sub-quota and reduce the overall GHG savings requirement. Public charging stations will start generating fewer tickets for electric passenger vehicles from 2031 to 50pc by 2035. France is also considering steep penalties for non-compliance, at €700/t CO2 not avoided for the GHG reduction requirement and at €40/GJ for the fuel targets. The penalty for not meeting hydrogen and advanced fuel sub-targets would be doubled, at €80/GJ. The consultation is open for comments until 10 June. By Simone Burgin Proposed GHG reduction by transport sector % 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Road and non-road diesel 5.9 7.1 8.3 9.5 10.6 13.2 14.8 16.2 17.5 18.7 Aviation 2.5 3.3 4.1 4.9 5.8 8.4 10.8 13.3 15.9 18.7 RFNBO sub-target (% en.) 0.0 0.0 0.0 0.0 1.2 1.2 2.0 2.0 2.0 5.0 Maritime 2.5 3.25 4.0 5.0 6.0 7.0 8.0 10.0 12.0 14.5 RFNBO sub-target (% en.) 0.0 0.0 0.0 0.0 1.2 1.2 1.2 1.2 2.0 2.0 LPG and natural gas fuels 0.0 0.0 2.7 6.3 10.6 13.2 14.8 16.2 17.5 18.7 DGEC Proposed energy content mandate by fuel type % (en.) 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Diesel 9.0 9.5 10.1 10.7 11.4 12.2 13.0 13.8 14.9 16.0 Petrol 9.5 9.7 10.0 10.2 10.5 11.1 11.8 12.6 13.4 14.5 Natural gas fuels 0.0 0.0 3.0 7.0 12.0 15.0 16.0 18.0 19.0 21.0 LPG 0.0 0.0 3.0 7.0 12.0 15.0 16.0 18.0 19.0 21.0 Marine fuel 2.9 3.8 4.7 5.9 7.1 8.2 9.4 11.8 14.1 17.1 DGEC Proposed caps and sub-targets % (en.) 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Feedstock caps Crop feedstocks 6.2 6.4 6.6 6.8 7.0 7.0 7.0 7.0 7.0 7.0 Annex IX-B feedstocks* 0.6 0.6 0.65 0.7 0.7 0.75 0.8 0.85 0.9 1.0 Cat. 3 tallow 0.5 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 Tall oil 0.1 0.1 0.1 0.1 0.15 0.15 0.15 0.15 0.15 0.2 Fuel sub-targets Advanced feedstocks 0.7 0.95 1.25 1.6 1.95 2.0 2.1 2.25 2.4 2.6 RFNBOs/Renewable hydrogen 0.05 0.2 0.5 1.0 1.5 1.6 1.7 1.8 1.9 2.0 *For diesel and petrol Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Q&A: Braskem Idesa Mexico terminal to feed cracker

14/05/25

Q&A: Braskem Idesa Mexico terminal to feed cracker

Mexico City, 14 May (Argus) — The new ethane storage terminal owned 50:50 by Brazilian-Mexican JV Braskem Idesa and the Netherlands-based Advario will be fully operational by mid-July, when the Etileno XXI cracker returns from a full-stop maintenance program, said Cleantho Leite, chief executive of Terminal Quimica Puerto Mexico (TQPM), in an interview with Argus. Edited highlights follow. What does the new terminal represent for Braskem after years of limited ethane supply? TQPM solves a long-standing ethane supply shortage in Mexico, which remains one of the largest ethane consumers in the region. Under the previous supply contract with Pemex, we did not have full supply. It was like having an F1 car with only 70pc of its fuel — eventually, we would run out of supply before even completing the race. Now, thanks to this terminal, Braskem can import the ethane it needs from the US to ensure consistent operations. Of course, we will continue buying from Pemex whenever possible, as its ethane remains the most cost-effective solution. But with this infrastructure in place, we are no longer tied to a single supply source. When will the terminal begin operating at full capacity? We are currently in pre-operational stages, and commercial operations are expected to begin by late May. Then, the Braskem complex will enter its scheduled maintenance shutdown. Once it resumes in mid-July, we will begin transitioning to full utilization of the terminal. The facility is fully capable of covering up to 100pc of Braskem's demand. In fact, it was designed with a 25pc buffer — excess capacity that could support future expansions. The equipment is ready, and whether we go from 75pc to 100pc in 15 days or in a month will depend entirely on Braskem's operating strategy. What is going to happen with the ethane Pemex no longer uses? For now, I do not see Pemex's own complexes significantly increasing their consumption of ethane. It is not like they will double their intake overnight. At least during 2025, Pemex is still in the process of reactivating its own crackers, so that volume will remain available to Braskem. If Pemex eventually requires more supply, it has its own import terminal. Alternatively, it could request capacity from TQPM if needed. Also, Braskem has long-term contracts that allow flexibility in adjusting volumes. If there is unused ethane in a given month, we can resell it to other locations. That has always been part of our strategy. The Braskem group, through Braskem Trading and Shipping, has consistently found alternatives for any surplus. Do you foresee any regulatory or permitting issues under the new legal framework in Mexico? No. We already hold all relevant permits from the now-defunct energy regulator CRE, which are now under the authority of the new CNE. That means no additional permits are required for the terminal under the new framework. Furthermore, the open-access guidelines established by the CRE are still valid and will be used by the CNE to issue and manage permits. The only other authorizations we need are from customs, which have not hindered pre-operations. Historically, the CRE reviewed transportation tariffs every five years, and we expect the CNE will follow the same regulatory schedule. What is the outlook for Braskem's crackers in Brazil regarding a transition to ethane? In Brazil, Braskem currently operates four crackers — three based on naphtha and one, in Rio de Janeiro, on ethane. The company is studying a broader shift toward ethane to reduce dependence on naphtha. Shipments to Brazil would follow a similar model to what we are doing in Mexico, with contracts signed with US suppliers. Our Salvador Bahia plant already receives ethane occasionally, using vessels that take roughly 12 days to arrive. Mexico has a geographical advantage — just two days away from US ethane. What are the long-term plans for TQPM? Our immediate focus is stable operation and efficiency. Long term, the terminal is well located in the Interoceanic Corridor and could serve future industrial projects. We have space and docking infrastructure to add tanks for chemicals, ammonia or propane. Nothing is confirmed yet, but in 3–4 years we expect opportunities to emerge. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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