Traders lose millions as LPG glut shocks market

Beijing

TRADERS in the liquefied petroleum gas (LPG) market face a "career-ruining" glut that has led to millions of dollars in losses as Chinese buyers, far from coming to the rescue, are in a stand-off with oil companies to cancel deals.

LPG, a historically niche and dislocated market, has ballooned with the advent of US exports due to the shale boom. The United States went from an importer to the largest single exporter of propane in just a few years, rivalling the Middle East Gulf producers.

"I can't remember it being this bad. There was massive new production out of the US, and people hoped the Chinese market might absorb it," one LPG trader said. "There was strong buying in the first four months of the year with low oil prices but that stopped, and the market is now a few million tonnes long…