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June 18, 2018

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Buying spree on propane FOB barge market spurs delays out of ARA

London (Platts)--6Mar2018/952 am EST/1452 GMT

A rapid bout of buying on the spot market for inland barges of propane has resulted in delays of up to three days for lifting in the Amsterdam-Rotterdam-Antwerp trading hub, according to market sources.

As many as 47 barges were booked in the spot market out of ARA over the course of Thursday, Friday and Monday, according to a market source.

The scale of the buying and logistical hiccups resulted in a number of barges being delayed by two or three days from Monday, said another market source, with delays also heard to be occurring inland in Germany.

"Since all barges are delayed at the moment, some storage in Germany are (nearly) running dry, but there is no propane on the offer for prompt deliveries," said a source in the German market.

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"Demand is very, very good," said another source on the German market.

Prices for barges also increased Monday to a $76/mt premium over the CIF large propane cargo market, the largest premium since March 7, 2017.

The arrival of cold weather last week in much of Northwest Europe, including Germany, spurred a sudden spike of buying interest on the consumer market for propane, which is used as a heating fuel.

That spike in demand was expected to arrive in November, the usual time frame for winter demand to pick up. But cold temperatures did not arrive as expected, leaving the spot market at a near-standstill during usually busy times of the season.

The temperature drop at the end of February also coincided with refinery maintenance at several major refineries, including the Miro refinery in Karlsruhe in southern Germany, which some sources had predicted could cause sudden tightness.

But by Monday sources said the demand surge was already expected to be short-lived, as temperatures in Germany had already risen back above zero.

Besides the rush to deliver product ordered last week and over the weekend, "new orders are not coming in," a source said Monday.

--Katherine Dunn,
--Edited by Jeremy Lovell,

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