March Recap - Asia Light Ends (LPG)

Asian light ends experienced extreme volatility in March 2026 as US-Israeli strikes on Iran (commenced 28-Feb, ongoing) effectively closed the Strait of Hormuz, removing ~30% of global seaborne LPG supply and ~60% of Asia's seaborne naphtha in a single shock. 

Compounding the pre-existing Juaymah NGL terminal outage (23-Feb), the dual disruption drove all four benchmarks to multi-year highs: Naphtha Japan CFR averaged $974/mt (+60% MoM, +60% open-to-close), Gasoline SG 92 RON averaged $127/bbl (+68% MoM, +47% open-to-close), Propane and Butane FE CFR averaged $885/mt and $880/mt respectively (+49–51% MoM). With USGC replacement cargoes on 45-day Cape voyages, the physical supply gap for LPG hits Asia mid-to-late April. As of late March, the market is transitioning from a pricing shock to a physical shortage phase. 

Market Activity

LPG

• Geopolitical friction drove high sentiment volatility on every US-Iran development; physical tightness remains the dominant force.
• Commitment gap emerged: sellers less willing to make Far East CFR offers until USGC cargoes successfully loaded; FOB Middle East bids seen for April Yanbu loading but no actual trade heard; buyers cautious about high spot prices and awaiting US-Iran negotiation outcomes.
• CFR Japan Propane: Chinese and FE importers refrained on high price concerns, giving rise to slightly looser propane supply/demand; butane buying remained robust with sellers maintaining a bullish stance.
• Several vessels believed to have transited Hormuz in the final week, many appearing headed to India where domestic supply was acutely tight.
• India in panic buying mode securing rare sanctions waivers; state enterprises outbidding private industrial buyers; propane premium over butane compressed from +$10–14/mt early-month to +$3/mt by 27-Mar.

Price Trends

LPG - two-wave repricing; Propane FE peaked $1,107/mt (19-Mar)

• Propane FE CFR 23kt (GX0000874): opened $758.75/mt (2-Mar); 9-Mar gap-up to $915.50/mt (+$166/mt single session); second spike to $1,106.50/mt (19-Mar) on India emergency buying; closed $920.75/mt (27-Mar).
• Butane FE CFR 23kt (GX0000876): opened $747.75/mt (2-Mar); peaked $1,101.50/mt (19-Mar); closed $917.75/mt (27-Mar).
• Propane FE/CP Swaps M1 (GX0000888, Period 1, Month): opened $52/mt (2-Mar), peaked $380/mt (23-Mar), averaged $190.31/mt for March, closed $240.75/mt (27-Mar) - forward market pricing sustained Middle East supply dislocation into April delivery.
• April CPs announced 31-Mar at Propane $750/mt (+$205/mt, +37.6% MoM) and Butane $800/mt (+$260/mt, +48.1% MoM) - highest CPs announced this year and a rare inversion with butane above propane.    
• April CP recommendations came in with an unusually wide spread of submitted prices, reflecting how volatile and uncertain market participants are about the current situation; the high CP set is heard to be attributed by elevated crude prices and netback support from high delivered spot prices in the Far East .
• Butane CP set $50/mt above propane driven by limited global butane supply, with the Middle East being the primary region producing mixed LPG cargoes. US exports are predominantly pure/heavy propane cargoes, offering limited relief to buyers specifically seeking butane.
• MoM: Propane $885.49/mt vs $592.89/mt (+49.4%); Butane $880.19/mt vs $584.26/mt (+50.6%).

Cross-Commodity Dynamics

LPG - propane-naphtha switching spread averaged near flat; substitution window closed

• GX0013964 (Period 1, Month): averaged -$0.38/mt vs -$33.95/mt in February; swung from -$53.75/mt (13-Mar) to +$88.50/mt (19-Mar), closing +$10/mt (27-Mar).

Cross-Regional Dynamics

LPG

• The blockade has re-routed trade flows as India shifts from Middle Eastern to US supply.
• Propane FE/CP Swaps M1 (GX0000888, Period 1, Month): opened $52/mt (2-Mar), peaked $380/mt (23-Mar), averaged $190.31/mt, closed $240.75/mt (27-Mar); widening through the month reflects India and SE Asia bidding up forward delivery premiums over the stranded Aramco CP as USGC cargo diversions accelerate.

Looking Down the Curve

• LPG - M1/M2 steepened sharply to $97.50/mt; April tightness fully priced.

M0/M1 peaked $101/mt (4-Mar), averaged $90/mt for March, settled $80/mt (27-Mar).

M1/M2 widening from $52/mt to $97.50/mt signals physical tightness extending firmly into April delivery.