Asia’s biggest liquefied petroleum gas (LPG) importers, including India and China, are racing to replace disrupted Middle East supplies with cargoes from the Americas, driving spot premiums to record highs, analysts and traders said, reports Reuters.
The supply shock is squeezing Asian petrochemical producers’ margins, forcing them to cut output, and raising costs for millions of Asian households, analysts and traders said. India and China are the biggest importers of LPG from the Middle East.
Middle Eastern LPG exports tumbled 73 per cent to 419,000 barrels per day (bpd) in March from the previous month, data from analytics firm Kpler showed.
The supply shock drove spot premiums for propane and butane loading in April from the Gulf to record highs of $250 per metric ton to March Saudi contract price swaps on March 30, according to pricing agency Argus.
Saudi Aramco sharply raised its April official selling prices amid the supply crunch. The April propane price rose by $205 per ton to $750, while butane increased by $260 per ton to $800.
“Key importers such as India are actively diversifying their sourcing strategies, increasing procurement from the United States, Norway, Canada, and other regions alongside remaining Gulf supplies,” said Vasudev Balagopal, global head of petrochemical trading at financial services platform Marex.
