It’s been a chaotic start to the new year for propane. In the past 12 days, the Mont Belvieu price is up over 15%, closing on Tuesday at 87 cents/gallon — the highest since October 2018. The usual culprit of winter weather has something to do with it, but not just in North America. Over the past couple of weeks, frigid temperatures in Asia, along with supply cutbacks from the Saudis, have supported U.S. propane exports to those markets, further tightening the U.S. supply/demand balance. But as is often the case these days, the market has another complicating factor. Delays transiting the Panama Canal have stacked up VLGCs — the vessels carrying U.S. propane to Asia — on both the Atlantic and Pacific sides of the waterway, pushing up charter rates to levels not seen in years. And on top of that, new transit-scheduling rules from the Panama Canal Authority will shove VLGCs to the back of the line, potentially making it even more difficult to get through the canal without significant delays. Today, we’ll explore these developments and what they may portend for the remaining weeks of winter.
Big Panama with a Purple Hat Band – Propane Price Squeeze, Panama Canal Rules Fluster Market
