Tropical storm Harvey forces up LPG prices
Tropical storm Harvey has continued to wreak havoc on the global LPG market – with Asia being affected by an increase in prices due to a lack of U.S. supply.
At least 300,000 tonnes in LPG shipments to Asia have been delayed after U.S. Gulf ports were shut, based on the estimates reported by Reuters. The storm has weakened into a depression as it moves to Louisiana, where there is also flooding.
However, marine export terminals operated by Enterprise Products Partners LP, Targa Resources Inc. and Phillips 66, all suppliers of LPG, are shut because of closures at the Houston Ship Channel, Port of Beaumont and Port of Freeport
Prices reacted swiftly to the U.S. delays, with Saudi Aramco setting its September contract prices for propane at $480 (£372) a tonne and butane at $500 a tonne, up $40 to $60 a tonne from July and also Saudi Aramco’s highest monthly prices since March.
Japan, South Korea and China are Asia’s top consumers of LPG. Major buyers include Japan’s Astomos Energy, South Korea’s SK Gas and China’s Oriental Energy.
Ong Han Wee, a consultant with FGE in Singapore, said: “Affected buyers will seek cargoes from elsewhere. The prices jumped last Friday in Asia, just before or when the hurricane made landfall. The Middle East contract prices are also higher now, most likely because of sentiment from Harvey.”
Texas Governor Greg Abbott has said “the worst is not yet over” for the south-east of the US state, after devastating Tropical Storm Harvey.
Rain continues to fall, he said, and flooding in certain areas may last another week. More than 20 people are reported dead and large parts of Houston, Port Arthur and Beaumont are under water.
Texas has carried out more than 8,500 rescues and more than 32,000 people remain in shelters throughout the state, Governor Abbott said. Another 10,000 members of the National Guard are said to be on their way, joining the 14,000 already deployed to tackle the disaster.