US propane traded volumes down in March

OREANDA-NEWS. March 22, 2016. Seasonally weak heating demand and narrower arbitrages led to a sharp decline in spot trading of propane at Mont Belvieu, Texas this month.

Traded volumes for propane at Mont Belvieu, Texas are down 70pc at the LST cavern and down about 38pc at the EPC cavern this month versus year-ago levels.

During the first half of March roughly 3.523mn bl of propane traded on the spot market, with about 1.99mn bl trading at the EPC terminal. During the same period in 2015, about 11.715mn bl transacted at the LST terminal and about 3.226mn bl traded at the EPC terminal.

The lower liquidity seen this month follows an uptick in trading at the EPC terminal during February, which saw a 19pc increase in volumes versus year-ago levels, following the expansion of the Enterprise export terminal in Houston. Yet in March narrower arbitrages with Europe and Asia, where LPG prices sank with naphtha, led to a slower pace of exports out of the US.

"The arbitrage has been squeezed with rising propane prices, while temperatures also have been mild for this time of year," a trader says.