In yesterday’s SIMON SAYS, I looked for the reason why we’re still seeing announcements of PDH expansions and new olefin crackers in the U.S., especially given the reality of China’s plans to stand by themselves in the petrochemical world, increasing their domestic production of petrochemicals while cutting back on imports of olefins, such as ethylene and propylene, and also the polymers, the resins and fibers.

I started the debate, in yesterday’s SIMON SAYS, as to whether the China card, played by many petrochemical companies in justifying investment decisions for new olefin crackers and propane dehydrogenation (PDH) plants, will finally get flipped, but rather than being the ace in the pack, it’s looking more and more as if it could even be the joker. Let’s hope for a happy conclusion!

I have to admit my son surprised me this summer by announcing…………he wanted to take chemistry as one of his three subjects for A-level, the precursor to University in England. Let me explain that in the Hill family, my father was a radio operator on bombers in World War 2, and for fun he became a radio ham in his later years, much to the annoyance of my mother.

Yesterday I was in my comfort zone, the market action was clearly at the front of the curve, where some real time world LPG supply issues were having a significant influence on demand decisions in Asia, as we enter that winter run-in, just like the old days. Middle East LPG exports in October down, down from Saudi Arabia and right down out of Iran. U.S. Gulf exports at no change, despite being told we were supposed to be getting a 15% increase in export slots late third quarter.

It’s so tempting to say I told you so, but it feels as if now is one of those moments, as the physical world for once is clearly calling the shots, and more importantly it’s shaping the market, especially as we near the pivot point, where the northern hemisphere winter begins.

I was relaxing in my Houston apartment a couple of nights ago, getting ready for the big ball game, they call it the “World” series here, and the Houston Astros are in it, playing another American team, surprise surprise, the Washington Nationals. Now, Washington used to be originally the Montreal Expos, but they are truly a U.S. team today, even their cap looks as if it’s sponsored by Walgreen’s.

Over 30 years ago I made my first, and until last week, my most recent visit to Mont Belvieu, Texas, about 40 miles to the east of Houston, along Highway Interstate 10. In the 1980s, I remember there were a few pipes poking out of the ground, and I had just visited Enterprise’s already impressive Terminal, I won’t say export terminal, as they were doing both exports and imports at the time. But now the whole area is a vast array of fractionation towers sprouting up in all areas. Some tall, some not so tall, but none were small.

It’s one of the most exciting parts of trading is not just buying a cargo somewhere, anywhere, but being able to fix a ship to load it, especially a Very Large Gas Carrier (VLGC). Of course, I like the pressurised, semi-refrigerated, mid-sizes etc., but to me the big ships are the heart of international LPG trading. I explained in Monday’s SIMON SAYS how the two cost elements of the ARB are the terminal fees, and the freight rate applicable for the Houston to Chiba, Japan voyage.

In yesterday’s SIMON SAYS, I started to explain the physical cost elements that sit in the middle of the ARB price spread, between Mont Belvieu and Japan, i.e. the terminal fees in the U.S. Gulf and the freight rate that applies between Houston and Chiba. I then followed it with the current market rumble I’m hearing on both of the legs, as we approach another winter in the northern hemisphere and as always an interesting time ahead for LPG prices.

I can’t believe I’ve been waxing lyrical about the LPG market since June this year, trying to expose interesting areas of debate, and hopefully reaching a few thought-provoking conclusions along the way. As SIMON SAYS evolves, so does my audience, amazingly it’s growing quickly, and I have to admit, writing the blog has maybe taken precedent over any form of official launch or roll-out. But it’s happening and I’m very appreciative of everyone’s support and ideas, long may it continue. I hope you feel the same as I do.