Onyx Research

Our team of skilled analysts, by utilising the depth and breadth of Onyx's proprietary data, position ourselves at the cutting edge of market analysis. This unique vantage point grants us an unparalleled perspective in the market, enabling us to identify emerging trends and lucrative opportunities.

LPGoing up or down ? (a Wu Friday edition)

2 min read

This week we are going to look at some updates in the LPG market, where the market’s been shifting faster than a trucker on the last leg of a cross-country coffee-fuelled haul.

It hasn’t exactly been smooth sailing in the market recently with aggressive rallies in shipping costs playing heavily on market dynamics. However, this week, we saw a sharp pullback with freight rates chilling out as water levels in January in Gatun lake reached historical highs for Jan, sitting at 81.4ft. Marry this with an oversaturation of ships in the Asian market and the BLPG rates absolute plummeted with prices dropping $75/mt in since Jan 09.



Arb buyers were eager to lock in these rates, bidding the arb heavily, sending it to highs of -$175.50/mt on Jan 22 with the Onyx COT dashboard showing a buy-side side skew on both an overall and 7-day basis in Feb LST/FEI, with trade houses and funds both on the buyside.


This strongly supported LST in the prompt which rallied as a result, soaring to 84.65c/gal from 61c/gal handles, with the move higher exacerbated by supply disruptions as Texas was hit by dangerously cold temperatures. Seems even Mother Nature wants in on the market action, giving a whole new meaning to the phrase ‘frozen assets’!”

Notably, Onyx counterparty dashboard saw producers on the buyside of Feb LST this week, while trade houses flipped to the sell side having been key buyers a week previous, likely looking to lock in some profit at current levels.


On the other hand, FEI during this time could not been further off the mark despite the physical window being well bid as it becomes cheaper to export propane from the US. It’s like throwing a grand BBQ party with the finest grills, only to realize everyone’s turned vegetarian overnight – plenty of propane, but no takers for the sizzle.

At the same time, we saw the EW weaken given the lower FEI levels, coming off to $88.32/mt on Jan 17 from 166.80/mt the beginning of January. Looking at the technicals, we can see the RSI for the FEB EW is well into oversold territory now with levels soaring below the lower Bollinger band and potentially primed for a retracement higher which we have seen as levels ticked up to … on Friday morning amidst warmer forecasted temperature in Europe. Tell that to my mal insulated overpriced London flat that lets the cold seep in faster than a bull market turning bear after a policy change announcement.


It’s been a wild ride – think LPG meets a game of hot potato. One minute you’re up, the next, you’re scrambling to figure out if you’ve invested in LPG or bitcoin during an Elon Musk tweet storm. We expect freight will remain the key market driver into next week and if freight continues to sell off we could be in for further upward price action.

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Our team of skilled analysts, by utilising the depth and breadth of Onyx's proprietary data, position ourselves at the cutting edge of market analysis. This unique vantage point grants us an unparalleled perspective in the market, enabling us to identify emerging trends and lucrative opportunities.