Seven macro indicators, seven transmission channels into LPG. The numbers are heuristic — the point is the relationships: which lever pushes which way, and through what mechanism.
Interactive driver map
Quick controlsload a regime, set Fed
Preset
Fed stance
Driver-by-driver transmissiondrag sliders → see channel
The most direct channel: Saudi CP is set monthly with reference to crude. Brent flat is also bunker fuel for VLGCs, so it pushes delivered cost up.
Brent 1M-6M + bw / − ct+0.00
−4 ct0+6 bw
Backwardation ↑→tight prompt crude→LPG term structure echoes→LPG back ↑
Crude structure leads LPG structure. Deep backwardation is a tightness signal that tends to drag CP-FEI structure with it; in tail regimes (Hormuz, sanctions) it's the cleanest early read.
Caixin China PMI50.0
445056
China PMI ↑→PDH operating rate ↑→propane import demand ↑→FEI ↑
China is the marginal propane buyer. PDH economics + petchem activity drive the FEI bid; weakness here breaks the demand leg of any rally.
US ISM mfg PMI50.0
425060
ISM ↑→US NGL/petchem demand ↑→Mt Belvieu firm→US export arb supports global LPG
Secondary demand channel. A weak ISM lengthens US balances, presses Belvieu, and opens the export arb wider — supportive of FEI but bearish for US prompt.
A strong dollar raises commodity costs in importer currencies (India, China, Africa) — demand destruction. Also tightens global financial conditions in parallel.
UST 10Y real % TIPS+1.50
−1.0+1.5+3.5
Real yields ↑→cost of carry ↑→inventory destocking→contango pressure / LPG bearish
Real rates set the financing cost of physical inventory. High real yields punish carry trades and bias structure toward backwardation via destock — a tightness that's mechanical, not fundamental.
A discrete overlay on the dollar and real-yield channels. The Fed's stance correlates these two and sets risk appetite for the whole commodity complex.
Net LPG bias
NEUTRAL
−1.5σ bear
0
+1.5σ bull
Set the sliders to see how the seven channels combine.
Jerry Xiong writes on AI governance, markets and operational risk for finance and business decision-makers.