Propane's long-standing winter rally is faltering. Northwest European large cargo prices have dropped to a three-week low, reversing seasonal patterns as record US inflows reshape global trade balances and weigh on the market.
The cif Amsterdam-Rotterdam-Antwerp (ARA) large cargo value fell by $8.50/t on Monday to $468.50/t, leaving propane $120/t below year-earlier levels. A lack of urgent buying has exposed the market to broader weakness in energy prices. There is no sign of the seasonal restocking that typically builds momentum at this time of year.
That cycle has defined the propane market for decades, with exceptions only in 2022, following Russia's invasion of Ukraine, and during the early Covid-19 years.
In 2024, prices surged by nearly 19pc between June and September, ending the quarter at $589/t. The year before, the rally was sharper, with a 35pc rise from $403.50/t in early June to $545.50/t by late September.
That pattern is even clearer when measured against crude. In 2024, propane gained nearly 16 percentage points relative to Brent between June and August, compared with around 9 percentage points in 2023. This year, by contrast, the grade has risen just 5pc outright, while its ratio to crude has stagnated in the mid-50s since June. The lack of movement suggests propane's seasonal cushion has all but disappeared.
The explanation lies more in supply than demand, and increasingly in geopolitics. Record inflows from the US — totalling 5.69mn t in the first three quarters of 2025 — stem from the trade shock triggered by Donald Trump's "Liberation day" and continue to pour into Europe.
The tit-for-tat tariffs imposed in April by Washington and Beijing were only briefly suspended a month later. With no lasting settlement, US LPG exports to China remain subject to a 10pc duty, leaving Europe as the main outlet for displaced volumes. This has removed any urgency for European buyers to secure positions early. Ample availability has capped values and kept the market sidelined, even as the traditional heating season approaches.
The weakness is reflected in the forward swap cif ARA curve, with the October-November paper spread at a $3/t contango, implying bearishness for October. November is not much stronger. Market sources report little urgency in spot purchases, with buyers reluctant to commit in the face of plentiful supply.
The divergence from historical patterns has wider implications. If propane no longer responds to the pull of the heating season, a structural reset may be under way. Europe could be entering an era where price floors are dictated not by seasonal weather but by Atlantic cargo flows — a shift with consequences for producers, traders and consumers.
For a market long accustomed to winter-driven tightness, this year's third-quarter slump may mark more than an anomaly. It could signal the end of propane's seasonality and the start of a new price regime built on structural oversupply.
