Commodity Trading — 02
LPG
Propane and butane cargoes out of the Gulf — priced against the regional contract benchmarks, and matched to what the receiving terminal can store.
How does Wisemann Capital trade LPG?
Wisemann Capital trades liquefied petroleum gas — propane, butane and agreed mixes — from Gulf origins. Cargoes price against the regional contract-price benchmarks, move in refrigerated or pressurised tonnage, and are specified against the receiving terminal's storage and the buyer's end use, whether heating, autogas or petrochemical feedstock.
How a cargo runs
LPG is a gas held as a liquid, so the receiving terminal constrains the trade as much as the price does.
End use and product
Propane, butane or a mix is chosen against the end use. Heating and cooking markets, autogas and petrochemical crackers each want a different product and ratio, and the specification follows from that rather than from what is on offer.
Terminal compatibility
Large cargoes move fully refrigerated; smaller coastal parcels move pressurised. The receiving terminal can usually handle one or the other, so storage type and capacity are confirmed before a cargo is priced.
Pricing
Middle East LPG prices against the regional monthly contract prices, with Far East index pricing for Asian delivery. The benchmark, the pricing month and the premium or discount are agreed together, because the choice of pricing month carries real value in a seasonal market.
Tonnage and scheduling
Very large and medium gas carriers are a specialist fleet. Vessel nomination, laycan, loading rates and demurrage are fixed at fixture, and seasonal demand is planned around rather than discovered.
Contract and payment terms
Our Trade Instruments Facilitation team aligns the letter of credit with the inspection regime in the sale contract, so payment and the documents that trigger it are drafted together.
Inspection and settlement
Independent inspection certifies composition and quantity at load. Settlement follows certified figures against the agreed pricing basis.
Contract specification
Typical parameters. Final specification is agreed per contract and certified by independent inspection.
- Products
- Commercial propane, commercial butane, agreed propane–butane mixes
- Composition
- Propane–butane ratio; ethane and pentane content capped
- Vapour pressure
- Within the limits set for the product and destination
- Contaminants
- Sulphur, water and residue capped per contract
- Carriage
- Fully refrigerated for large cargoes; pressurised for smaller parcels
- Pricing basis
- Regional monthly contract price or Far East index, plus premium or discount
- Inspection
- Independent composition and quantity certification at load
- Payment
- Documentary letter of credit against conforming documents
- Incoterms
- FOB, CFRindicative
What we manage on your behalf
Seasonal demand
Heating demand in the northern winter tightens the market every year. Coverage is positioned ahead of the season, because buying into it means buying into a move that has already happened.
Terminal fit
A refrigerated cargo sent to a pressurised terminal cannot be discharged. Storage type and capacity are confirmed before anything is priced.
Product ratio
Petrochemical buyers and heating markets value propane and butane differently. The ratio is specified against the buyer's use, not left to what the load port happens to produce.
Specialist fleet
Gas carriers are a narrow fleet with tight scheduling. Fixture terms, laycan and demurrage are agreed early rather than improvised at nomination.
What moves the market
The Gulf is one of the world's principal LPG export regions, with associated gas processing and refining producing large, steady volumes. Demand is split between seasonal heating and cooking markets and year-round petrochemical feedstock, and the two pull on price differently through the year.
For a buyer, that means timing and terminal fit are worth more than a sharp read on the monthly benchmark. The price is published; what a cargo costs to land and store is where the work is.
Common questions
Frequently asked
What is the difference between propane and butane?
Both are liquefied petroleum gases. Propane has a lower boiling point, so it stays gaseous in cold weather and suits outdoor heating and petrochemical cracking. Butane is heavier and easier to store under modest pressure, and is widely used for cooking and as a blending component. Many markets buy a mix of the two.
Why does the receiving terminal matter so much?
Because LPG must be kept liquid either by refrigeration or by pressure, and terminals are generally built for one or the other. A refrigerated cargo needs refrigerated storage at discharge. Confirming storage type and capacity first prevents a cargo arriving somewhere it cannot be unloaded.
How is LPG priced from the Middle East?
Usually against the regional monthly contract prices published by Gulf producers, with Far East index pricing often used for delivery into Asia. The benchmark, the pricing month and any premium or discount are agreed together in the contract.
Is LPG demand seasonal?
Partly. Heating demand rises in the northern hemisphere winter and tightens the market each year, while petrochemical demand runs year-round. Planning coverage around the heating season is one of the most reliable ways to control cost.
Related
- Crude OilPhysical crude oil trading — grade selection on API and sulphur, benchmark-plus-differential pricing, storage at Fujairah and independent inspection at load and discharge.
- SulphurSulphur trading in granular, prilled, pastille and molten form out of the Middle East — origin access, hazardous-cargo tonnage and quality certification at load.
- Pre-Shipment FacilitationPre-shipment facilitation — supplier verification, pre-shipment inspection, quality and origin certification, export permits and cargo readiness before loading.
Discuss an LPG requirement
Tell us the product, volume, destination and terminal storage type, and we will come back on availability and pricing basis.
Start an enquiry