As China consumes more LPG to feed its propane dehydrogenation plants, LPG imports could set a new record this year.
Grieg Shipbrokers noted that China’s average monthly LPG imports have gone up from 347,000 tonnes in 2013 to 682,000 tonnes this year.
In 2014, China imported 7 million tonnes of LPG and that could go up to 8 million tonnes this year, opined Grieg.
Grieg observed, “The main contributor to the increase in imports is PDH plants commencing operations over the past 12 to 15 months.”
There are six PDH plants in operation in China and at least a dozen others are still being constructed to feed the country’s propylene demand.
In August Yantai Wanhua’s PDH plant, the biggest in China, began operations. The plant can generate 750,000 tonnes of propylene in a year, and can use up to 900,000 tonnes of propane and 600,000 tonnes of butane as feedstock in a year.
The six PDH plants can produce 3.45 million tonnes of propylene in a year, theoretically necessitating 4 million tonnes of propane a year. Propylene is used to make plastics and other chemicals.
China’s petrochemical plants also import LPG to produce alkylate and methyl tert-butyl ether.
However, Grieg cautioned that falling energy prices have squeezed petrochemical margins and market players should monitor the trends.
Grieg said, “This has led to some PDH plants operating at reduced utilisation and the potential diversion of contract cargoes initially intended for use in the plants.”