Chinese liquefied petroleum gas buyers have prompted a price surge as they scramble to replace US supplies of the widely used fuel following Beijing’s tough response last week to Washington’s punitive tariffs.
Buyers are trying to swap US cargoes that have already been purchased with alternatives, including LPG from the Middle East, traders said. But swaps, diversions or outright purchases of shipments from other origins will come at a hefty price, they added, due to the sudden nature of China’s requests and the large volumes involved.
The premium of Middle East-origin LPG compared to all shipments delivered into East Asia — including US cargoes — widened to over $100 per metric tonne late on Friday, said traders. The price spread, known to the industry as the Saudi contract price vs Argus Far East Index swap differential, remained at that level in early Monday trade.
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