CHINA DATA: March LPG imports fall 17% on year on lower demand, higher stocks

China's LPG imports in March fell 16.9% year on year to 1.27 million mt, the latest General Administration of Customs data showed. The drop was mainly due to lower demand amid higher stocks, market sources said.

China's LPG demand had been heavily hit over the past two months as the government took a series of measures to contain the spread of coronavirus, which included restricting gatherings and travel.

Slower demand also led to higher inventories at many LPG import terminals which dampened import appetite, sources noted.

"Many terminals were mainly consuming their inventories in March," said a source in Shanghai.

China imported 918,716 mt of propane in March, down 15% year on year.

Butane imports, meanwhile, stood at 333,246 mt last month, down 22.8% year on year, the customs data showed.

China's propane dehydrogenation plants operated at an average rate of 75% in March, down from 77% seen a year earlier.

Although the January-March quarter is typically the maintenance period for many PDH plants in China, weaker domestic demand and lower processing margins had further discouraged import interests, market sources said.

Over January-March, China imported 3.86 million mt of LPG, down 17.4% year on year, the customs data said.

Propane imports were 2.96 million mt in Q1, down 15% year on year, while butane imports were at 834,838 mt, down 27.8% year on year, the customs data showed.

S&P Global Platts calculates China's LPG imports by adding the propane and butane figures to those categorized as "other LPG" under the HS code 7111990. This is to reflect China's import of liquefied gases more accurately.

According to the customs department, the definition of "other LPG" is a complex combination of hydrocarbons produced by the distillation of crude oil.

Market sources said it could be mixed gas containing many hydrocarbons and that it was mainly imported or exported on trucks. However, the import of "other LPG" is much lower than that of propane and butane.

IMPORTS FROM OMAN, AUSTRALIA RISE

Oman was the largest LPG supplier to China in March, sending 306,142 mt, up 251% year on year.

Over January-March, Oman exported 619,974 mt of LPG to China, up 610% year on year, becoming the third largest LPG supplier of China, the data showed.

Industry sources said that some LPG from Iran could be transferred via Oman now, but no China-based buyers confirmed the talks.

Besides, LPG imports from Australia also saw significant year-on-year growth in March and in the first quarter, which were 113,274 mt and 318,559 mt, up 153% and 254% year on year, respectively, the customs data showed.

More and more Chinese LPG terminals bought Australian cargoes after the Prelude Floating Liquefied Natural Gas (FLNG) facility started supplying LPG barrels since July last year, market sources said.

The Prelude FLNG project, which is located in western Australia, has a production capacity of 3.6 million mt/year of LNG, 1.3 million mt/year of condensate and 0.4 million mt/year of LPG.

The UAE remained the top supplier of LPG to China over January-March at 796,725 mt, down 32.3% year on year. The country, however, only exported 93,984 mt of LPG to China in March, down 74% year on year, the data showed.

CHINA'S LPG IMPORTS (Unit: mt)

TOP FIVE LPG SUPPLIERS TO CHINA (Unit: mt)

*Includes other countries

*Total figures have been rounded off

Source: China's General Administration of Customs