Skip to main content

Global LPG demand growth falters, says ESAI Energy

Published by
Hydrocarbon Engineering,


China and India’s LPG demand has slowed compared to the past few years, according to ESAI Energy’s newly published Global NGL Outlook.

The two markets have been the locomotives of global demand growth, accounting for a combined 190 000 bpd increase in demand last year. This year, however, demand will grow only a little more than 100 000 bpd. 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 bpd compared to a year ago. By comparison, annual growth was 130 000 bpd 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 bpd. Year-on-year growth was much higher earlier this year and a robust 60 000 bpd in 2017.

“Higher prices and Chinese tariffs on U.S. 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 years ago when market prices were much lower.

“Furthermore, China’s trade dispute with the US is worrisome for that country’s demand growth. After all, a new wave of PDH investment is essential if China’s demand growth is to accelerate again. The ongoing trade dispute leads us to question whether investors in new PDH capacity will become hesitant, creating uncertainty and downside risk to our demand forecast.”

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/26092018/global-lpg-demand-growth-falters-says-esai-energy/

You might also like

Catalysts 2019

Catalysts 2019

Catalysts 2019 is an online conference for professionals in the downstream sector. Since this is a completely virtual conference, you can join us from anywhere in the world, absolutely free. Register for free today »

 
 
 

Embed article link: (copy the HTML code below):


 

This article has been tagged under the following:

Downstream news Asia Pacific downstream news