ARGUS LPG Freight

Overview

Argus covers freight on key LPG trade routes. Combined with Argus LPG benchmarks, this provides an unparalleled, full-picture view of the market for industry players.

Argus LPG freight rates are underpinned by a rigorous and transparent methodology, based on continuous market feedback. Every day, a global team of price reporters surveys a wide range of market participants, including brokers, charterers, vessel owners and trading firms.

Price indications, fixtures as well as real-time views on market developments, are all used to inform the assessments. The ‘all-day assessment’ approach means the opinions of all participants across the global market carry the same weight.

The price assessments are complemented by daily commentaries, giving players the latest insight and helping them to make informed decisions.

Markets covered

Argus assesses daily LPG freight for Very Large Gas Carrier (VLGC), Handysize and coaster routes, including:

  • VLGC Houston to Chiba
  • VLGC Houston to Flushing
  • VLGC Mideast Gulf to Japan (Ras Tanura to Chiba)
  • 12,000t Houston-East Coast Mexico (Tuxpan or Pajaritos)
  • 1,800t Tees-ARA (Amsterdam-Rotterdam-Antwerp)
  • 1,800t Tees-Lisbon

Customers that benefit

  • Traders
  • Suppliers
  • End users
  • Ship owners and operators
  • Utility companies
  • Feedstock buyers
  • Shipbrokers

Key features

The increasing volatility in VLGC rates has brought them firmly into focus.

Freight rates on a Houston-Chiba basis rose by 50% to $115/t between January 2 2019 and January 2 2020, and reached a four year high of $136/t on 21 January.

Freight rates and LPG prices often do not move in tandem, which can dramatically affect the proportion of freight costs for the delivered price of the product.

US freight costs 

As market participants increasingly recognise their exposure to shipping costs, they call for more and better tools to manage freight risks. That means reliable, independent benchmarks.

The US Gulf story

The prime candidate in need for such benchmarks are the US Gulf coast exports.

The US has grown to become the largest LPG producer globally, with production rising from 40.5mmt in 2008 – before the shale gas boom – to 76.2mmt in 2018, according to the latest Argus and WLPGA World Statistical Review of Global LPG.

The increased production has led to rapid growth in North American LPG exports, increasing to over 40.6mmt/y in 2018 from 11.3mmt/y a decade earlier, transforming global LPG trade flows.

US LPG exports 

The exports from the US Gulf coast to Asia and Northwest Europe are now vital trade routes and require the highest degree of transparency and risk management.

Argus is in a prime independent position to offer this service to the market.

Connecting the dots

Argus is already the global leader in LPG pricing. It holds the key benchmarks for physical propane and butane for Europe (cif ARA large cargo) and Asia-Pacific (Argus Far East Index or AFEI). These benchmarks serve as a basis for futures contracts, listed by major Exchanges like CME and ICE.

With the addition of VLGC freight indexes for Houston-Chiba and Houston-Flushing, this offers the market a unique, one-stop solution for effectively engaging the LPG trade out of the US Gulf in level playing field.

US LPG flow 
The full picture through Argus LPG freight. Source: Argus Media

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