LPG market dynamics and impact on Nigeria · 2020. 12. 15. · Argus publishes key LPG pricing data Argus International LPG Market-leading report provides readers with daily international

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Argus LPG

LondonAlan Hayes

VP Business Development

LPG market dynamics and impact on Nigeria

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• One of the world’s leading PRAs, Argus has more than 1000 staff members and offices in the world’s principal commodity trading and production centres

• Publishing more than 11,000 daily spot and forward price assessments, plus market intelligence for world commodities markets

• Coverage includes:

• Energy, including oil, natural gas, power, coal, asphalt, base oils, biomass, emissions and more

• Fertilizers

• Petrochemicals

• Metals

• Services

• Price reporting and indexation

• Consulting

• Conferences

• Indexation examples

• Asia-Pacific LPG

• European LPG

• US crude oil

3

Argus publishes key LPG pricing data

Argus International LPG

Market-leading report providesreaders with daily internationalLPG prices for physical andderivatives markets, includingArgus North Sea Index, the cifARA large cargo assessmentsfor C3 and C4, the daf Brestprices and the Argus Far EastIndex

Argus LPG World

Provides industry and companynews, trading and inventoryinformation, as well as LPGshipping information and monthlyprices for international butane,propane, ethane and naphtha

Argus Russian LPG andCondensate

Features contract and borderprices for LPG in the FSU andeastern Europe as well asintelligent analytical commentaryon the international and domesticRussian market, news stories andstatistical data

Argus NGL Americas

Source for Americas LPG prices,market-moving news and expertcommentary. Provides insights intothe domestic industry and itsrelated commodity-related newsincluding olefins, crude oil andnatural gas

4


LPG consumption is forecast to grow

800

850

900

950

1,000

1,050

1,100

1,150

1,200

1,250

1,300

2019 2020 2021 2022 2023 2024 2025

Nigeria residential

Seasonal boost for global butane prices


0

100

200

300

400

500

600

7000

2 D

ec 2

01

9

09

Dec

20

19

16

Dec

20

19

23

Dec

20

19

30

Dec

20

19

06

Jan

20

20

13

Jan

20

20

20

Jan

20

20

27

Jan

20

20

03

Fe

b 2

02

0

10

Fe

b 2

02

0

17

Fe

b 2

02

0

24

Fe

b 2

02

0

02

Mar

20

20

09

Mar

20

20

16

Mar

20

20

23

Mar

20

20

30

Mar

20

20

06

Ap

r 2

02

0

13

Ap

r 2

02

0

20

Ap

r 2

02

0

27

Ap

r 2

02

0

04

May

20

20

11

May

20

20

18

May

20

20

25

May

20

20

01

Ju

n 2

02

0

08

Ju

n 2

02

0

15

Ju

n 2

02

0

22

Ju

n 2

02

0

29

Ju

n 2

02

0

06

Ju

l 20

20

13

Ju

l 20

20

20

Ju

l 20

20

27

Ju

l 20

20

03

Au

g 2

02

0

10

Au

g 2

02

0

17

Au

g 2

02

0

24

Au

g 2

02

0

31

Au

g 2

02

0

07

Se

p 2

02

0

14

Se

p 2

02

0

21

Se

p 2

02

0

28

Se

p 2

02

0

05

Oct

20

20

12

Oct

20

20

19

Oct

20

20

26

Oct

20

20

02

No

v 2

02

0

09

No

v 2

02

0

16

No

v 2

02

0

23

No

v 2

02

0

30

No

v 2

02

0

Global Butane Prices

Butane Mt Belvieu, USD/t Butane ARA/UK large cargo, USD/t Butane Argus Far East Index, USD/t

Nigeria LPG Imports


Top Source of LPG Imports 2020

Houston, TX [US]

Punta Europa Terminal[GQ]Norfolk, VA [US]

Bonny [NG]

Cotonou [BJ]

Marcus Hook [US]

Buenos Aires, BA [AR]

370

390

410

430

450

470

490

Argus West African LPG Index

Argus West Africa butane index USD/t, cfr

Argus West Africa propane index, USD/t, cfr

US production held up-despite global downturn


46000

47000

48000

49000

50000

51000

52000

53000

54000

55000

Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20

US Field Production - Propane ('000b)

US Production has kept exports flowing


0

50000

100000

150000

200000

250000

300000

350000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

US LPG Exports

US LPG Production Outlook


75,000

77,000

79,000

81,000

83,000

85,000

87,000

89,000

91,000

93,000

95,000

2019 2020 2021

Production

Production

44,000

45,000

46,000

47,000

48,000

49,000

50,000

51,000

2019 2020 2021

Export Availability

Export Availability

Short-term LPG Outlook (24 months)Lower refining output and crude production; demand supported in the key sectors

▾Shallow dip in 2020 followed by strong recovery

▸Plenty of product available for export, supported by high stock levels

▴Demand supported by petrochemical sector

▾Commercial demand forecast to fall in many markets in 2020; gradual recovery only partially completed by 2022

▴Strong, broad-based demand growth in other sectors

▸As most demand is in the residential sector, the impact of Covid-19 has been less pronounced than in other regions – so far

▴Increased production from Nigeria forecast, primarily from gas processing

▴The large residential markets are forecast to continue growing

▾Slow recovery for commercial and industrial sectors

▾Refinery runs have been cut across the region and recovery will be gradual

▾Demand destruction, particularly in transport sector

▾Lower output from refining forecast 2020-2022 and beyond

▴Borealis’ Antwerp plant expected online in mid-2022

▴Following a small decline in 2020 production, we forecast a return to strong growth in supply from 2021

▴Growing demand, particularly in petchems

▴Significant new production through 2022 – both from refining and gas processing

▾Increasing demand, albeit it at a slow pace

▴More volumes available for export

11


Price Outlook

0

50

100

150

200

250

300

350

400

450

Jan 20 Feb 20 Mar 20 Apr 20 May 20 Jun 20 Jul 20 Aug 20 Sep 20 Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21 Apr 21 May 21 Jun 21 Jul 21 Aug 21 Sep 21 Oct 21 Nov 21 Dec 21

LPG Price Forecast

Propane Mt Belvieu (EPC) Butane Mt Belvieu (EPC)

Concluding thoughts


• LPG prices have been supported by gasoline blending and reduced supply

• VLGC freight is volatile given shifting arbitrages and vessel availability

• Asia has become the world’s largest consumer and it is therefore the region that sets the price of global LPG.

• Risks-

• Weaker Demand in Asia-will US supply adjust?

• US exports looking for a home

Alan Hayes

[email protected]+ 44 (0) 7715 068 203
mailto:[email protected]

LPG market dynamics and impact on Nigeria · 2020. 12. 15. · Argus publishes key LPG pricing data Argus International LPG Market-leading report provides readers with daily international

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