LPG Prices in Brazil Accelerate in November 2024

The onset of November 2024 brought with it a significant surge in LPG prices in Brazil. LPG prices in Brazil have been on the rise since the third quarter of 2024. The upward trend accelerated in November, leading to a significant surge in prices.

The LPG prices in Brazil have surged on the back of a shift in demand due to colder weather with butane prices admitted a hike of 4.1% to settle at USD 705/MT Butane CFR Santos, while propane prices rose by 4.6% to settle at USD 628/MT Propane CFR Santos during the third week of November 2024. The demand for LPG as a heating fuel skyrocketed due to the onset of winter season. Households and industries alike turned to LPG to keep warm and power their operations. This increased demand, particularly in regions experiencing colder-than-average temperatures, strained supply chains and put upward pressure on prices.

Moreover, the hurricane season in the United States throughout October 2024 wreaked havoc on energy infrastructure, including LPG facilities. This led to disruptions in the supply chain, limiting the availability of the product for export to Brazil. The decline in US exports further tightened global supply, exacerbating the price surge. Additionally, the strong draw on domestic LPG supplies in the US has led to a significant decline in inventories. This depleted supply further limited the availability of the product for export, contributing to the upward pressure on prices. Geopolitical tensions and uncertainties in various regions of the world have also played a role in the price surge these tensions have disrupted trade flows and increased transportation costs which all contributed to higher prices.

As per ChemAnalyst, the LPG prices in Brazil are expected to sustain their bullish trend during December 2024. As the winter season progresses, the demand for LPG is likely to remain strong, potentially putting further upward pressure on prices. However, in the short term, to alleviate the burden of consumers and businesses in Brazil that face higher energy costs, the government may consider implementing measures such as subsidies or tax cuts on the product. Additionally, promoting energy conservation and exploring alternative energy sources could help reduce reliance on the product and mitigate the impact of price fluctuations. Recently, Brazil's proposed LPG assistance program has been delayed for further review and potential revisions. The program aims to provide LPG to low-income families but faces challenges in ensuring effective distribution and preventing fraud.