The LPG market always seems to find some way of contradicting itself, and guess what, it looks as if it’s taking that course right now, maybe it’s not such an ideal time, just as we start to think of the transition from summer into winter. Let’s see if we can make sense of all that’s happening in my next two blogs, but I can’t promise!
Do prices in Asia or in the U.S. move the ARB, do freight rates move the ARB, do terminal fees move the ARB? I thought it was a pretty good question my 12-year-old son asked me before I left for Houston, clearly the school fees are working! I suppose the easy answer is to say that they all do, but which element moves the ARB the most, and should we care?
In Friday’s SIMON SAYS I talked about the move in Asia, away from the relative rigidity of the Saudi Aramco Contract Price (CP), and more towards greater spot pricing, especially as supplies are increasingly related to both Mont Belvieu and Far East Index (FEI) price indices. We know that the majority of cargoes will head to Asia, but what drives cargoes at the margin to seek a buyer in North West Europe, especially when originating from the U.S.?
We’ve had quite a few famous people come over to our beach restaurant on the Isle of Wight, I won’t name drop, well, there’s maybe one that recently grabbed my eye that I want to mention. Sat enjoying the view, and the hopefully the food, was Sir Jim Ratcliffe, head of Ineos, one of the world’s largest chemical producers.
Everyday we have our eyes and ears focused on propane. It’s natural as propane is the most common, by far, of the Natural Gas Liquids (NGLs) processed into individual products. This is exacerbated by the fact that a lot of refinery butanes, over history, never actually leave the refinery front gate. My blog U.S.
Although my main interest is to show the macro side of our business in the SIMON SAYS BLOG, now and then I like to keep you appraised of what individual countries are doing. After seeing Brazil’s goalkeeper Allison, you just have to love Brazilian names, performing brilliantly in the dull European Champions League football Final in Madrid on Saturday (soccer to those across the pond), it had to be Brazil!
I thought a bit of history might grab us on the last Friday in May. I remember selling butane cargoes into Marcus Hook, to Sun, to Sam Slovak or was it, Charlie Mitchell, anyway it was product going into their refinery for gasoline blending. They weren’t regular buyers, but paid good prices, and getting the first sale in was always a feeling of achievement.