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April 2021: LPG tank car sublease rates

April 12, 2021 By    

Each month, LP Gas provides updates on the U.S. propane market, as well as the latest trends. The data for April 2021 compares LPG tank car sublease rates with Mont Belvieu LDH propane futures delivery. This month’s data comes from Energy Transport Insider. Subscribe to Energy Transport Insider’s sublease price assessment here.

Stock information for Ferrellgas and Suburban Propane is also provided.

PROPANE MARKET METRICS

Chart: Energy Transport Insider

Chart: Energy Transport Insider

Commentary:

  • Strong propane exports have led to high prices for propane in current months as exporters ship out barrels to take advantage of demand.
  • Meanwhile, distributors are passing on storing propane during the summer given the backwardation in the forwards market. Prices are lower in future months. The meaning: There’s no profit incentive to store a product with expected declining value.
  • That’s pressuring summer (April to September) tank car subleases. Summer subleases trade from February to June. The lighter-colored yellow columns reflect projected price expectations.
  • Tank car sublease prices for 2019 and 2020 are shown for comparison. The weakness in 2020 prices starting in April reflects the onset of the COVID-19 pandemic.

STOCK WATCH

Company 12-month chart (as of March ’21) Price (3/25/21) Current Yield 52-Week Low 52-Week High YTD Price
Performance
Ferrellgas – FGP FPG-march-2021-stock-watch $0.80 0.0% 0.16 0.95 207.7%
Suburban Propane – SPH SPH-march-2021-stock-watch 14.85 8.0% 12.08 18.18 (0.1%)

Source: Company data, FactSet and Wells Fargo Securities LLC

Note: Ferrellgas delisted from the New York Stock Exchange in January 2020 and now trades on the OTC Markets.

Featured image: iStock.com/traffic_analyzer

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