lpg market dynamics and impact on nigeria · 2020. 12. 15. · argus publishes key lpg pricing data...
TRANSCRIPT
-
Market Reporting
Consulting
Events
Argus LPG
LondonAlan Hayes
VP Business Development
LPG market dynamics and impact on Nigeria
-
Argus Media group notices
Copyright © 2020 Argus Media group. All rights reserved.
• The Argus Media group (referred to herein as “Argus”) makes no representations or warranties or other assurance, express or implied, about the accuracy or suitability of any information in this presentation and related materials (such as handouts, other presentation documents and recordings and any other materials or information distributed at or in connection with this presentation).
• The information or opinions contained in this presentation are provided on an “as is” basis without any warranty, condition or other representation as to its accuracy, completeness, or suitability for any particular purpose and shall not confer rights or remedies upon the recipients of this presentation or any other person. Data and information contained in the presentation come from a variety of sources, some of which are third parties outside Argus’ control and some of which may not have been verified.
• All analysis and opinions, data, projections and forecasts provided may be based on assumptions that are not correct or which change, being dependent upon fundamentals and other factors and events subject to change and uncertainty; future results or values could be materially different from any forecast or estimates described in the presentation.
• To the maximum extent permitted by law, Argus expressly disclaims any and all liability for any direct, indirect or consequential loss or damage, claims, costs and expenses, whether arising in negligence or otherwise, in connection with access to, use or application of these materials or suffered by any person as a result of relying on any information included in, or omission from, this presentation and related materials or otherwise in connection therewith.
• The information contained in this presentation and related materials is provided for general information purposes only and should not be construed as legal, tax, accounting or investment advice or the rendering of legal, consulting, or other professional services of any kind. Users of these materials should not in any manner rely upon or construe the information or resource materials in these materials as legal, or other professional advice and should not act or fail to act based upon the information in these materials.
• Copyright notice: Copyright © 2020 Argus Media group. All rights reserved. All intellectual property rights in this presentation and the information herein are the exclusive property of Argus and and/or its licensors and may only be used under licence from Argus. Without limiting the foregoing, you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of Argus.
• Trademark notice: ARGUS, the ARGUS logo, Argus publication titles, and Argus index names are trademarks of Argus Media Limited. For additional information, including details of our other trademarks, visit argusmedia.com/trademarks.
-
A view of Argus
• 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
-
Copyright © 2019 Argus Media group. All rights reserved.
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
Copyright © 2018 Argus Media group. All rights reserved.
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
Copyright © 2019 Argus Media group. All rights reserved.
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
Copyright © 2019 Argus Media group. All rights reserved.
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
Copyright © 2018 Argus Media group. All rights reserved.
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
Copyright © 2018 Argus Media group. All rights reserved.
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
-
Copyright © 2019 Argus Media group. All rights reserved.
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
Copyright © 2020 Argus Media group. All rights reserved.
• 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]