Weekly Mont Belvieu Propane-Butane price review August 18th, 2023
Our assessment for last week's daily Mont Belvieu propane and butane in USD/mt (11.8% and 7.4% down respectively on the weekly average):
14th August: 345.0; 384.5
15th August: 324.0; 368.5
16th August: 323.7; 367.2
17th August: 322.4; 366.9
18th August: 326.4; 364.4
The effect of the previous week's price movement was seen last week as LPG prices tumbled significantly to sub-400 USD levels. Butane prices average prices crashed by 7.4 % ending the week at 364.4 USD/MT from a close of 396.1 USD/MT, in the previous week.
Propane prices also closed closer to 300 USD/MT; at 326.4 USD/MT following the massive 11.8% drop in the average weekly prices.
The main reason for the price action is due to the uncertainty with China's economic performance, which has recorded a slowdown as seen in recent economic reports. Oil prices are also experiencing a decline in movement despite the production cuts from Saudi and OPEC. This is quite interesting as the global community was beginning to see a crude oil price of 100 USD by December. This is bad news for countries looking to make more USD in the coming months, but good news for those who feel the strain in their bank accounts as oil and gas prices increase.
Local LPG prices in Nigeria
Local depot prices sold for as high as 12 million at the beginning of the week, but prices relaxed to 11.5 Million per 20MT levels in Lagos and South South by the end of the week. A significant stress on local prices is the Naira / USD exchange rate which went as high as over 900 Naira, but is now closer to 800 and may go lower due to the intervention of the Federal government. We don't expect LPG prices to go higher in the coming weeks as a result of the aforementioned.
On the retail side, there are indications that LPG prices are still in the range of N8000 to 9000 per 12.5kg in most places nationwide.