US propane exports reached a record 1.7 million bpd in March 2023, the highest level since the EIA began collecting this data in 1973. Propane is consumed globally for space heating and is used as a petrochemical feedstock.
Low US demand for propane this past winter and higher propane production led to lower US propane prices relative to Northwest Europe and Asia, underpinning the record export levels. Propane production, a byproduct of natural gas processing, has increased rapidly over the past 10 years as US natural gas output has expanded. Expansion projects at US propane export terminals in recent years have allowed for more US exports. Propane exports also reached a record annual high in 2022, averaging 1.4 million bpd.
US propane exports to Asia have increased rapidly in recent years, driven in part by the region’s increasing demand for propylene, a chemical that can be produced from propane. Propylene is used to manufacture polypropylene, a versatile plastic with many uses, including in car interiors, packaging, and personal protective equipment.
Japan is the largest importer of US propane, followed by China and South Korea. In 2022, approximately 53% of all US propane exports went to markets in Asia, and the three major East Asian economies (Japan, China and South Korea) accounted for nearly 84% of Asia’s propane market. US propane exports to China increased to 211 000 bpd in March 2023 from 92 000 bpd in March 2022, and averaged 176 000 bpd during the first three months of 2023. China’s demand is set to increase further: seven new propane dehydrogenation (PDH) units started up in 2022; six more are expected to start up in 2023.
US propane exports to Europe set record highs of 236 000 bpd in the summer of 2022 because of uncertainty about propane supply resulting from Russia’s full-scale invasion of Ukraine. US propane exports to Europe averaged 247 000 bpd in the first three months of 2023.
The increase in propane demand as a petrochemical feedstock in Asia has contributed to higher global propane prices, and incentivised increased propane exports from the US. Propane prices rose significantly in both Asian and Northwest European trading hubs this winter. Spot prices at the Mont Belvieu export hub in the US also rose, but at a slower rate.
Read the article online at: https://www.hydrocarbonengineering.com/petrochemicals/06062023/eia-monthly-us-propane-exports-in-march-2023-reach-a-record-high/
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