Exclusive LPG Report: How to balance rising global supplies with slowing demand?
This summer, the seasonal slowdown in global LPG demand has become a bigger challenge for the US and Middle East amidst their rising production. Weak petrochemical margins are expected to cap Asia’s import appetite, with growing VLGC tonnage supply limiting upsides on freight rates.
08 May, 2024
Key report takeaways:
- Global LPG loadings this year have soared above historical highs contrasting against slowing demand
- US summer LPG stock building has begun as rising production meets saturated demand, limiting exports
- Higher Middle East exports are further adding length to the market, despite declining supplies from Iran
- Asia’s imports have been healthy so far this year, but weak petchem demand will cap upsides. Similarly, Europe’s import appetite is waning as seasonal heating demand fades
- Our newly released Panama Canal weekly report highlights an increase in Southbound Neopanamax vessels waiting to transit the Panama Canal in April. Daily transits allowed are gradually rising, significantly reducing VLGC utilisation with fewer Cape of Good Hope diversions
- Lower booking combined with increased new vessel deliveries have increased tonnage in the market, keeping VLGC freight rates tepid
- As with previous summers, trading activity is expected to slow this quarter, with producers in the US and Middle East facing challenges in finding homes for their growing supplies
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