September 2, 2015 [OPIS] - China has leapfrogged Canada and Mexico in a meteoric rise to become the biggest export destination for U.S. LPG, according to the latest figures by the EIA.
U.S. LPG exports to China rose from 5.9 million bbl in the first quarter to 8.7 million bbl, which peaked at 3.3 million bbl in April before subsiding to 2.4 million bbl in May and rebounding to 3.0 million bbl in June.
That outstripped volumes to the U.S.’s North American neighbors where overland exports via pipeline, rail or truck are considered. Canada and Mexico, historically the top two destinations, were next at 8.6 million bbl and 7.5 million bbl, respectively, during the second quarter. Rounding out the top five was Brazil at 6.5 million bbl and Japan at 5.5 million bbl.
China’s LPG import demand has surged as their propane dehydrogenation (PDH) projects come on stream, with U.S.-origin supply swelling to 14.6 million bbl in the first half of 2015 from around zero at the same time 2013.
The country added around 1.8 million tons per year of propane intake capacity in 2014 as three PDH began operations, with a further two plants slated to add around 1.7 million tons per year of capacity this year (see OPIS Alert, March 30, 2015).
Asian countries such as China, Japan and South Korea continue to absorb a growing proportion of U.S. product as export volumes continue to climb. Out of the record-high 69.9 million bbl of LPG exported in the second quarter, some 28.5% was sold into the Far East compared to 17.9% at the same time last year.
In contrast, U.S LPG exports to European countries over the same period plateaued at 8.1 million bbl, while Europe’s share of overall U.S. export volumes fell to 11.6% from 17.1%.