I’ve always found it difficult to understand how on earth anyone makes money with an LPG purchase deal based on Saudi Aramco’s Contract Price (CP). In fact, I’ve rarely found anyone else who knows how it’s done either. But around this time of year, every year, CP becomes the talk of the market, as if it possesses this mesmerizing draw, sucking in believers and non-believers by the score.

It really seems as if the LPG market has tried to move towards a greater degree of homogeneity in recent years, especially in the face of a market that has become far more multifaceted, truly global, more transparent, and increasingly influenced by corporate performance, in relation to stock market valuations. But I think the complexities and differences are far more exciting!

It has to be over twenty years ago since I last set foot in Taiwan, and I must have met with both CPC and FPC, but my memory pretty much stops there. I do, though, remember visiting a company called LCY Chemicals, I don’t think they have been featured in the LPG import business into Taiwan since, but they did have an import facility in Zhenjiang, China, but only for smaller pressurised LPG cargoes.

There’s nothing that makes a ship owner smile more than seeing a decent number of ships getting fixed in the market, of course the grin widens if the rates are also edging up, and if the levels are jumping up, well I’ll leave that one for you to decide. As all eyes last week were focused on the consequences of the drone attack at Saudi Arabia’s key crude oil processing facility in Abqaiq, charterers hesitated for a while, but not for that long.

Yesterday I explored the implications for LPG as a result of last week’s drone attack on the Abqaiq crude processing facility in Saudi Arabia, that the damage is probably far greater than has been explained so far, and that Saudi Arabia’s current focus is on security, crude oil and the impending IPO of Aramco.

The start of last week was all about crude oil, geopolitical issues in the Middle East, and the usual ups and downs of the energy markets. We kept an eye on what levels crude oil prices reached or fell to, adjusting LPG prices accordingly, but it was easy to get sucked-in to the big picture, and maybe not get the LPG portion into a proper perspective.

Wow, it does feel as if it’s been a very long week, the drone attack in Saudi Arabia probably caught you and me napping at the weekend, then crude went up on Monday, crude went down on Tuesday, I’ve had a really enjoyable trip to Stavanger in Norway, which included a lovely dinner in a huge converted tomato greenhouse miles away from anywhere, and was owned by a lady that probably spoke for longer than I did during my afternoon presentation…well not quite, and

In yesterday’s SIMON SAYS I introduced a new phenomenon starting to take shape in the international LPG market, with the catalyst being the extra VLGC cargoes being supplied from Marcus Hook on the U.S.

It’s been a long time since I’ve seen something rather unusual start to occur, especially as far as the direction of trade is concerned for LPG cargoes. I’m intrigued with what appears to be a new phenomenon emerging from the east coast of the U.S., but it doesn’t stop there. In fact, it appears to be the catalyst for a chain of events, that we might end up see happening on a regular basis.

As the geo-political world enters that post incident period of claim and counter claim, the markets are trying to gauge what this means for numbers, the direction is clearly up. But there seems to be discomfort or even distress, trying to work out how far prices could move up, and how long this will all last, not just until we get to know the true extent of the damage, but also how long it’s going to take to repair.