India's July LPG imports set for record at 1.94 mil mt, port delays seen

India is slated to import 1.94 million mt of LPG in July, according to Kpler shipping data, with the record volumes set to further build up inventory boosted by recent increases in domestic production.

Steady inflows have lengthened waiting times for Very Large Gas Carriers to discharge at India's terminals, shipping sources said.

Imports into Asia's largest LPG consumer after China have largely been met by baseload term supply, according to trade sources.

Imports in July are set to be the highest since 2014 when Kpler first recorded shipments into India, with volumes up 39.42% from June inflows at 1.39 million mt.

The Middle East Gulf is the main supply source, with 1.86 million mt imported from the region in July, while 1,000 mt came from South-Central Asia and the remaining 76,000 mt from unspecified locations.

VLGCs, the main vessels, are ferrying 1.50 million mt of LPG into India, Kpler data showed. Out of the 1.94 million mt of LPG, volumes of 954,000 mt have been delivered, with the remaining 985,000 mt are in transit.

Prior to this, LPG imports soared 21% on the month to 1.71 million mt in August 2021, the highest according to India's Petroleum Planning and Analysis Cell data dating back to 1998.

India's LPG imports started easing in November 2021 to 1.59 million mt, as pandemic-related movement curbs and a seasonal fall following the October Diwali celebrations dampened demand, PPAC data showed.

LPG imports declined 11.3% on the month to a 14-month low of 1.38 million mt in May, PPAC data showed June 23, as high cooking fuel prices driven by soaring international values weighed on demand growth.

The country also relied on domestic LPG production that rose 3.5% on the month to 1.13 million mt (9.05 million barrels) in May, according to PPAC data, in line with the increase in average refining rates, as consumption edged up to 2.17 million mt in the month from an 11-month low in April.

Price downtrend

The FOB Middle East propane averaged $849.63/mt in April and $778.13/mt in May, while the FOB Middle East butane averaged $860.5/mt in April and $785.02/mt in May, S&P Global Commodity Insights data showed.

The rebound in July imports came as the FOB Middle East propane's average fell to $722.8/mt in June and $700.3/mt in July as of the 20th, while FOB Middle East butane's average declined to $724.55/mt in June and $695.54/mt in the current month as of July 20, according to S&P Global data.

Maintenance at the Haldia Oil Jetty 1, or HOJ-1, on India's east coast since July 1 compounded discharge delays as imports increased and stockpiles rose. HOJ-1 is due to reopen around mid-August, shipping sources said.

That prompted vessels to be diverted to HOJ-2 and HOJ-3, which "are active" in operation, a ship broker said. "Delays are also caused by monsoons and ullage issues on the Indian west coast," the ship broker said.

Local media reported that monsoons wreaked havoc in Central and West India, Bay of Bengal, Gujarat, Madhya Pradesh, Chhattisgarh, Maharashtra, Telangana, Andhra Pradesh, Karnataka, and Rajasthan in the week ended July 16 and are expected to last until July 23.

The average waiting time at HOJ-2 and HOJ-3 ranged three to five days with the closure of HOJ-1 for upgrades, according to ship brokers.

Waiting time at the Deendayal port in Kandla on the country's northwest coast averaged eight to nine days. Pipavav, Dahej, Mumbai and Jawaharlal Nehru Port Trust, or JNPT, all in the northwest Gujarat state had waiting times averaging six to seven days, while Vizag and Ennore on the east coast had an average waiting of six to seven days, ship broking data showed.

Waiting times at three Mangalore terminals averaged between two and five days, though no delays are seen at Mundra, Porbandar, Sikka and Tuticorin, shipping sources said.

Terminal congestion and delays had been limited in June, when waiting times were absent or averaged up to seven days, ship brokers said.

State-run Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. brought 13 LPG shipments in June aboard VLGCs and medium-sized gas carriers, up from seven in May, according to ship brokers.

Strong LPG inflows in November 2021 had led to severe congestion, forcing some vessels to wait more than two weeks to discharge, VLGC fixtures from ship brokers showed.