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Global LPG demand growth falters

China and India’s LPG demand has slowed compared to the past few years, according to ESAI Energy’s latest Global NGL outlook. The two markets have been the locomotives of global demand growth, accounting for a combined 190,000 b/d increase in demand in 2018. This year, however, demand will grow only a little more than 100,000 b/d. Slower growth will undermine the expansion of exports from North America and the Middle East and weaken LPG prices relative to naphtha.

According to ESAI Energy, Chinese LPG demand has grown 80,000 b/d compared to a year ago. By comparison, annual growth was 130,000 b/d in 2017, and even higher the year before. Meanwhile, China’s refiners are producing more LPG than ever thanks to this year’s extraordinary increase in crude processing. Consequently, only a small portion of China’s increased demand is being satisfied by imports. Separately, this past summer the year-on-year growth of Indian LPG demand slowed to just 25,000 b/d. Year-on-year growth was much higher earlier this year and a robust 60,000 b/d in 2017.

‘Higher prices and Chinese tariffs on US LPG are contributing to weaker growth,’ explains ESAI Energy Head of NGLs Andrew Reed. ‘In India, residential users with limited income face rising prices for non-subsidised LPG, which weighs on growth compared to a couple of years ago when market prices were much lower. Furthermore, China’s trade dispute with the US is worrisome for that country’s demand growth.’

News Item details


Journal title: Petroleum Review

Keywords: Energy

Countries: India - China -

Subjects: Liquefied petroleum gas, Forecasting

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