NWE propane prices bounce back from multi-year lows

: LPG
25/05/07

Prices have recovered from a ‘Liberation Day' slump but have not yet reached their pre-tariff level, writes Efcharis Sgourou

Northwest European propane prices have rebounded after slumping in the wake of US president Donald Trump's tariff announcement on 2 April. But they remain below pre-tariff levels after Trump ratcheted up his trade war with China a week later.

Propane swaps and large cargo prices on a cif Amsterdam-Rotterdam-Antwerp (ARA) basis hovered at $450-460/t over the second half of April, more than $80/t above the five-year lows reached on 9 April, when Trump watered down tariffs on all but China, hiking this rate to 145pc. But prices were still more than $100/t below where they stood prior to Trump's announcement on 2 April.

An unexpected lack of availability when spot buying interest emerged over the second half of April helped the large cargo and swaps values rebound. A few bids lodged for a mid-to-late-May delivery of 22,400t lifted the physical price relative to front-month paper to premiums of $9-12/t, after it had fallen to a discount of $1.50/t in early to mid-April, when the price collapsed.

The unmet bids shed light on the level of premium needed to lure regional selling, while fears of an excess of US LPG being redirected to Europe owing to its trade war with China cooled as the market awaits the wider ramifications later this month — Beijing's 125pc retaliatory tariff on US goods starts from 13 May. Just over 600,000t of US LPG was shipped to northwest Europe in April, largely unchanged on March and close to the rolling six-month average, Kpler data show, while about 400,000t is forecast to arrive in May as of 7 May. The US-northwest European arbitrage is also unfavourable for spot trade despite recent cif ARA price gains.

North Sea selling was also stable last month compared with March, with the UK and Norway exporting 400,000t of LPG in April, and forecast to ship just over 300,000t in May as of 7 May, according to Kpler. But this is significantly lower than a year earlier as production in the North Sea continues to undershoot expectations.

NWE large cargo propane, swap price

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25/06/14

Israel strikes Iran gas plants in first energy attacks

Dubai, 14 June (Argus) — Israel launched drone strikes on two gas treatment facilities in southern Iran on 14 June, marking the first attacks on energy infrastructure since the latest round of hostilities began on 13 June. Israeli drones targeted a gas treatment plant in Assaluyeh that processes sour gas from phase 14 of the offshore South Pars gas field, Iranian state media reported. South Pars, which Iran shares with Qatar, is the world's largest gas field and has 24 development phases. Images and videos circulating on social media showed parts of the Assaluyeh facility on fire. The plant includes four gas sweetening trains, each with a capacity of 14mn m³/d, enabling total output of up to 56mn m³/d from phase 14. At full capacity, the phase can produce 77,000 b/d of gas condensate, 2,900 t/d of LPG, 2,750 t/d of ethane and 400 t/d of sulphur. One of the four trains was hit, temporarily halting 12mn m³/d of production from one offshore platform, according to state media. A separate fire broke out at the Fajr-e-Jam gas processing plant, which handles gas from both South Pars and the Kangan field, and produces around 200 t/d of LPG and 80 t/d of gas liquids. Iran's oil ministry said emergency teams were deployed to both sites immediately after the incidents, helping to contain the fires. South Pars has been in production since 2002 and accounts for 70–75pc of Iran's total gas output. The field also supplies a significant share of feedstock for Iran's petrochemical and gasoline production. The Qatari portion of the field is known as the North field. Saturday's attacks are the first time either side has targeted energy infrastructure. Israel focused on military and nuclear sites in Natanz, Isfahan and Fordow when it launched its initial attacks in the early hours of 13 June. Iran responded with ballistic missile and drone strikes on military targets in Israel, including the Kirya complex in Tel Aviv, which houses the defence ministry headquarters. Further Israeli strikes on Iranian energy infrastructure could threaten up to 3.4mn b/d of crude output and around 1.5mn b/d of exports. By Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Borealis not reviewing assets in Europe: CEO

25/06/12

Borealis not reviewing assets in Europe: CEO

London, 12 June (Argus) — Austria-based petrochemicals producer Borealis is not conducting any asset reviews in Europe despite prolonged weakness in the region's polyethylene (PE) and polypropylene (PP) markets, chief executive Stefan Doboczky told Argus . "It's not that we would never look into something," Doboczky said. But "none of our major installations [in Europe] I would say are being a real problem, they are all contributing [to profitability]." Doboczky acknowledged that "Europe will never be the cost leader". But "there are strong differences between the economics of crackers and the polyolefin systems", he said. "If you look at our more coastal setups, we are much more flexible than certain steam crackers would be inland." Borealis' coastal steam crackers in Porvoo, Finland, and in Stenungsund, Sweden, have greater flexibility to run lighter feedstocks and optimise product yields. Their location also allows for easier feedstock procurement via vessel, Doboczky said. Borealis will continue to bring polyolefins into Europe from its sister plants in the Middle East and North America, which have advantageous positions on feedstock and production costs. Doboczky's comments follow Netherlands-based LyondellBasell's announcement last week that it plans to divest four European olefins and polyolefins plants to focus on "economically sustainable sites". The European petrochemicals sector has faced mounting pressure from weak demand and high costs, prompting several producers to review or close assets. Saudi Arabia's Sabic is also understood to be assessing its European footprint, although details remain limited. Borealis, by contrast, is pursuing a differentiation strategy focused on downstream expansion. Last week, it announced a €100mn ($114mn) investment to triple PP foam production capacity at its Burghausen site in Germany. The firm has 650,000 t/yr of PP production capacity at that site. "We are very much focused on investing in smaller units, in the €50mn-100mn space to gain a strong share in a particular niche," Doboczky said. This is in addition to around €2bn of overall capital expenditure already committed in Europe for new projects. "Borealis has no alternative to this [polyolefins] business," Doboczky said, adding that the company will continue to focus on specialty, high-end applications rather than volume-driven segments. It also has a notable presence in the downstream compounding sector, which uses part of its PE and PP resin output. Demand outlook Borealis expects 2025 demand to be broadly in line with 2023-24 levels, although it could vary by grade and segment. "We see too much volatility at the moment and I think we need to see how the world looks like after 9 July," Doboczky said, referring to the 90-day tariff pause on US imports. "The general sentiment that PP is even more difficult, I would subscribe to that." PP demand has been hit harder than PE, given its exposure to big-ticket consumer goods and the automotive segment, both of which have been affected by cost-of-living pressures. Construction demand is also under pressure due to economic headwinds and high financing costs. For the time being, Borealis continues to see offtake from the automotive segment within its expected range, owing to a larger share of electric vehicle production, which uses a higher proportion of PP to offset battery weight. The company is also targeting growth in rigid and flexible packaging through increased innovation. Project updates Earlier this year, OMV and Adnoc agreed to merge Borealis and Borouge into a new entity, Borouge Group International, which will be headquartered in Vienna and listed on the Abu Dhabi Securities Exchange. The move coincided with the acquisition of Canada-based Nova Chemicals by the new entity. Borealis is constructing a 750,000 t/yr propane dehydrogenation (PDH) plant in Kallo, Belgium, which is scheduled to come online in the second quarter of 2026. The Borouge 4 project in Abu Dhabi is on track to start up ethylene and PE production in late 2025 or early 2026, Doboczky said. By Sam Hashmi Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico inflation quickens in May

25/06/09

Mexico inflation quickens in May

Mexico City, 9 June (Argus) — Mexico's consumer price index (CPI) accelerated to an annual 4.42pc in May, with strong pressures on meat and egg prices and modest acceleration in core inflation. The index increased for a fourth consecutive month, accelerating from 3.93pc in April after reaching a four-year low of 3.59pc in January. The result from statistics agency Inegi came in above the 4.37pc median estimate of analysts polled in Citi Research's 5 June survey to reach the fastest inflation since November 2024. It also pushes CPI to above the central bank's long-term objective inflation range of between 2pc and 4pc. Nevertheless, the central bank has been clear in its communication that the rate-cutting cycle will continue, with a likely half-point cut in the target interest rate to 8pc at the next policy meeting on 26 June. Core inflation, which excludes volatile food and energy, reached an annual 4.06pc in May from 3.93pc in April, ending a run of eight consecutive months below the 4pc level. Within the core, consumer goods inflation rose to 3.67pc from 3.38pc the previous month. while services accelerated to 4.63pc from 4.56pc in April. Meanwhile, annual non-core inflation surged to 5.34pc in May from 3.76pc in April, largely tied to agricultural goods prices. Annual energy inflation in May reached 3.5pc with regular 87-octane gasoline inflation just 0.54pc, as prices remain capped at Ps24/l ($4.78/USG) under a voluntary price cap between fuel retailers and the government. Month-over-month, headline CPI rose by 0.28pc in May after a 0.33pc increase in April. Core prices were up by 0.30pc from 0.43pc from April, while non-core prices sped 1.24pc, driven by a 3.5pc month-over-month acceleration in meat and egg prices, as well as produce prices speeding 2.8pc from April. This more than offset the moderation in energy prices with a second tranche of seasonal subsidies starting in May, slowing electricity inflation 18pc monthly. Looking ahead, Mexican bank Banorte said it would continue to monitor inflationary pressures on eggs and poultry after a ban on the import of the products from Brazil, as well as the evolution of the screwworm outbreak in the south of the country and on the coming tropical cyclone season and its impacts on fruits and vegetables prices. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ethane rejection concerns heighten on export block

25/06/06

Ethane rejection concerns heighten on export block

Houston, 6 June (Argus) — US traders and gas producers are mulling over the implications of higher rates of US ethane rejection as the indefinite curtailment of US ethane cargoes to China spurs fears of a supply glut of the feedstock. Exporters Enterprise Products and Energy Transfer , the only waterborne exporters of US ethane, announced on 29 May and 4 June, respectively, that the US Commerce Department's Bureau of Industry and Security (BIS) had ordered them to apply for licenses to export ethane to China. On 4 June, Enterprise reported that emergency license applications for three of its cargoes, totaling 2.2mn bl, had been denied . "News that the [BIS] doesn't intend to issue ethane export permits suggests an increasingly dire situation," said one market participant. US ethane inventories stood at 63.9mn bl in March, the latest data available from the US Energy Information Administration (EIA), up 9.8pc versus last year, when supplies totaled 58.2mn bl. The US produced 2.83mn b/d of ethane from natural gas processing in 2024, according to annual data from the EIA, resulting in a surplus of 500,000 b/d over its domestic petrochemical consumption. Nearly all of this excess is exported, and about 46pc of shipments last year, or 227,000 b/d, went to China. Large-scale exports of the feedstock, which is used in ethylene production at steam crackers, are relatively new. Waterborne exports of ethane began in 2016, and until that time, excess supply that wasn't profitable to fractionate and pipe to storage caverns at Mont Belvieu, Texas, were rejected upstream at processing plants into the natural gas stream. Midstream operators estimated that US ethane rejection clocked in around 500,000 b/d in 2015, when the US produced a little more than a third of the ethane it does today at 1.13mn b/d and consumed only 1.07mn b/d domestically. Some analysts fear higher rates of US ethane rejection going forward could depress natural gas prices. "The recently announced ethane export restrictions to China have raised some concerns over a potential oversupplied domestic market, which could lead to more ethane rejection and create near-term price pressures," on natural gas, RBC Capital Markets analyst Scott Hanold said in a note to investors. An uptick in ethane left in the gas stream also pushes gas operators to potentially contend with a higher calorific content. Natural gas producers have been investing in additional pipeline capacity to accommodate growing demand for LNG exports, however, and the infrastructure is more flexible now than it was back in 2016. "The US exports approximately 250,000 b/d of ethane to China, and that's about 0.4bn cf/d of ethane that would need to be rejected into the US natural gas system," according to Craig Barry, Argus ' lead ethylene consultant. "That should be manageable for US producers, especially as new natural gas egress pipelines come online in the second half of 2025 and into 2026." Short-term pricing From 28 May to 5 June, prompt-month Mont Belvieu, Texas, EPC ethane fell by 19.4pc to 19.25¢/USG, its lowest point since 13 November. Ethane's differential to its fuel value relative to Nymex natural gas at the Henry Hub turned negative on 29 May and remained negative thereafter, troughing at -5¢/USG on 4 June, the steepest discount since 15 December 2022. A flip to rejection by gas producers is typically indicated when ethane enters negative territory relative to its fuel value in spot natural gas in the Permian. Ethane's premium to spot gas prices at the Waha hub in west Texas declined from 12.37¢/USG to 9.4¢/USG across the period, and if Waha prices remain steady, ethane prices would need to halve to enter rejection territory in the Permian. Major operators may also be incentivized, however, to reject ethane into the gas stream at greater rates if prices fall below spot gas on the US Gulf coast, according to market participants, and would need to dip below a milder 17.375¢/USG to turn negative relative to its fuel value in Houston Ship Channel gas, which it sits at its tightest premium to since 4 March at 1.88¢/USG. Steep declines in prompt-month ethane pricing have widened the contango seen along the forward curve, possibly reflecting stronger sentiment once the US trade dispute with China is resolved. The prompt-forward month carry widened to 1.625¢/USG yesterday. June EPC ethane traded at a stronger 21.25-22.5¢/USG Friday morning, and sits at a 2.8¢/USG discount to its fuel value relative to Nymex gas, based on intraday values. By Joseph Barbour Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

New Zealand official gas reserves fall by 27pc in 2024

25/06/05

New Zealand official gas reserves fall by 27pc in 2024

Sydney, 5 June (Argus) — New Zealand's estimated gas reserves fell by more than a quarter last year, highlighting the need for financial incentives to improve supply, resources minister Shane Jones said on 5 June. Proven and probable (2P) gas reserves dropped to 948PJ (25bn m³) on 1 January, down by 27pc from 1300PJ a year earlier, according to New Zealand's business, innovation and employment ministry, MBIE. The 352PJ write-down comprises 119PJ of extracted reserves and a 234PJ of downward revision of reserves by operators of existing fields. Previous MBIE forecasts predicted that annual output would fall below 100 PJ/yr by 2029, but the latest revisions show that this level will be reached by 2026 ( see table ). Oil and condensate 2P reserves were at an estimated 37.2mn bl on 1 January, down from 44.7mn bl a year earlier. New Zealand's only refinery closed in 2022, meaning the nation is now wholly reliant on oil product imports. The Coalition government has reiterated its plans to remove the country's 2018 offshore exploration ban , put in place by the former Labour administration. Rising gas prices are putting increasing pressure on manufacturers, Jones said. TheCrown Minerals Act Amendment Bill will returns to parliament this year, and if approved it will reduce decommissioning risks, reform regulation and make exploration permit issuance more flexible, Jones added. The bill was first tabled in October. New Zealand last month promised NZ$200mn ($120mn) to buy stakes of up to 15pc in new gas fields, as part of efforts to drive new supply. Quarterly gas output reached a 40-year low in October-December , with major industrial users cutting production to reduce strain on the nation's power grid and gas supply. But investors no longer have confidence in the nation because of the exploration ban , Australian independent Beach Energy chief executive Brett Woods said. Beach Energy operates New Zealand's Taranaki basin offshore Kupe gas project. Utility Meridian Energy is urging Wellington to prepare LNG import facilities , as the expected supply shortfall will be "structural and significant". By Tom Major New Zealand oil, gas production outlook PJ/yr 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Gas 106.8 100 94.8 80.6 73.8 66.8 60.6 56.2 50.4 43.8 34.9 LPG 5.7 5.3 4.6 3.5 3 2.8 2.5 2.1 2 1.8 0.7 Crude/condensate ( b/d ) 13,700 13,000 12,100 10,400 9,200 8,300 7,500 4,700 4,200 3,600 2,900 Source: MBIE Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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