Iran's LPG exports reach record high of 973,260 mt in May

Iran's LPG exports loading in May were estimated at around 973,260 mt, about a third above April-loading shipments and exceeding the 859,000 mt lifted in May 2022, which was the previous record since sanctions were imposed on the oil producer in 2014 and 2018, according to shipping sources.

The latest May shipments could be the highest monthly exports on record from Iran, trade sources said, and are in line with projections of around 1 million mt/month for the rest of the year.

Shipments in the first five months of 2023 totaled about 4.013 million mt, according to shipping and trade sources.

With the monthly average at 802,652 mt over January-May, total exports for 2023 are projected at 9.63 million -- if the loading programs kept around current levels or more -- surpassing analysts' earlier projections of about 8.3 million mt.

Increasing LPG exports come with higher output in Iran, which analysts said has significantly cranked up oil production since the start of the year as it is exempted from OPEC+ cuts due to the US sanctions and driven by the South Pars gas field expansions.

And while Iranian crude and condensate exports declined from four-year highs of around 1.7 million b/d in May, to average at eight-month lows of 922,000 b/d in June, S&P Global Commodities at Sea data showed, the producer continues to tap oil stocks in floating storage to boost exports.

Like oil, China is the dominant buyer of LPG from Iran.

Iranian LPG cargoes loading in May largely arrived in China around early-June at ports in southern and north-east China, according to Platts cFlow ship and commodity tracking software from S&P Global Commodity Insights.

Iran's May-loading shipments ranged between 17,300 mt and 48,000 mt, with 15 vessels departing Assaluyeh port containing mixed LPG cargoes shipped by cmpanies including South Pars Gas Co., or SPGC, Palayesh Parsian Sepehr Co. or PPS -- a subsidiary of Tadbir Energy -- and Parsian Sepehr.

Seven ships sailed from Siraf port in May, with cargoes shipped by SPGC, PPK, Kangan Petro Refining Co., or KPRC, and PPK-Tombak, shipping sources said.

Five ships departed Bandar Imam Khomeini port in May, with cargoes shipped by BIK authorities and one vessel departed Kharg island, moved by Kharg Petrochemical, shipping sources said.

Butane in discount to propane

The vessels were mainly bound for Chinese ports, such as Jiaxing, Shanghai, Kashing, Majishan, Shulanghu, Gulei, Guangdong, Fujian, Longkou, Ningbo and Lianyungang, according to Platts cFlow.

The vessels departing Assaluyeh included Sona, Vela Gas, Gas Vision, Nexo, Fabino Gas, Sea Opera, Xavia, Kanha, Tulip, Serenity Gas Nereus 1 and Tris Gas.

Kanha also lifted a parcel at Kharg port, according to shipping sources.

Ships that left Siraf included Tower Rise, Gas Commerce, J Tiger, Tris Gas, Tower Rise, L Primo Gas and Falcon, while vessels that departed Bandar Imam Khomeini, or BIK, port were Cape Gas, Gas Vision,Sea Opera, Captain Nikolas and Gas Marta, shipping sources said.

Other than China, some vessels such as Kanha, also carried smaller lots to Iraq and Pakistan, Platts cFlow data showed.

Serenity Gas and Tris Gas were also seen anchoring in Iraq's Khor al-Zubair anchorage/Umm Qasr around early-June; Nereus 1 was seen in Sohar, Oman early-June, while Falcon was seen in Jaigad, on India's west coast, also early-June, data from Platts cFlow showed.

Record exports from Iran arriving in June to Asia, as well as other Middle Eastern supplies, helped Chinese importers to be selective in purchases, with several bidders said to have not awarded tenders due to offers deemed at high premiums.

Ample supply of mixed propane/butane cargoes has also deepened the discount of butane against propane in recent months, with Saudi Aramco setting the term contract prices for July with butane at $25/mt below propane. The month-one August CP swaps has since seen the butane discount to propane narrowing to $18/mt, according to S&P Global data.

Abundant LPG supply in Asia has also pushed down prices, whetting Asian buyers' appetite. FOB Middle East propane averaged $426.35/mt in June, from $475.39/mt in May and $556.13/mt in April, S&P Global data showed.

FOB Middle East butane averaged $404.55/mt in June, down from $468.77/mt in May and $550.92/mt in April, according to S&P Global data.