CHINA DATA: May LPG imports rise 7% on month amid rebound in butane demand

China imported 2.12 million mt of LPG, comprising both propane and butane, in May, up 7.1% month on month, mainly supported by a strong rebound in butane imports due to a demand recovery, data from the General Administration of Customs showed June 21.

China imported 532,531 mt of butane in May, up significantly by 55.8% from 341,900 mt in April, the customs data showed.

Domestic demand for butane has increased since May with the rise in temperature, as LPG suppliers normally raise the proportion of butane in LPG in summer that is used for burning purpose, due to the consideration of safety and better utilization rate, according to industrial sources.

In addition, petrochemical plants' demand for butane also increased for oil blending materials such as MTBE, which was heard to have also supported the growth of butane imports in May, sources noted.

Singapore MTBE prices surged over March-April amid Russia-Ukraine conflict, which incentivized Chinese suppliers to move more MTBE cargoes to Singapore for better netback, market sources said. This encouraged domestic petrochemical plants to raise their production for the commodity, leading to increased demand for the feedstock butane, market sources added.

On the other hand, China imported 1.58 million mt of propane in May, down 3.1% month on month, despite a rebound in propane dehydrogenation plants' operating rates in the month, data showed.

China's 17 PDH plants operated at an average run rate of 75% in May, up from 62% in April, S&P Global Commodity Insights reported earlier.

"Propane demand shrank as its proportion in LPG that is used for burning purpose reduced with the approach of summer, with the decrease outpacing the demand growth from PDH plants last month," a source said.

On an year-on-year basis, LPG imports fell by 5.5% in May, with propane and butane imports dropping 6.2% and 3.2%, respectively, the customs data showed.

The average price of LPG imported by China in May was $889/mt on a delivered basis, down 6.3% month on month, the first decline after three consecutive months' rise since February, according to S&P Global's calculations based on customs data.

Middle East inflows rise

The US remained China's biggest LPG supplier, sending 648,155 mt in May, but the volume dropped by 13.8% month on month, and fell by 16.3% year on year, customs data showed.

Meanwhile, China's LPG imports from the Middle East suppliers, including the UAE, Oman, Qatar and Saudi Arabia, all saw a month-on-month increase in May, according to customs data.

LPG inflows from these four Middle East countries totaled 1.23 million mt in May, accounting for 58.1% of China's total LPG imports, up 20.4% month on month and rose 17.4% year on year, calculations showed.

Industry sources said that volumes from the UAE and Oman probably included some cargoes from Iran. Iran's May-loading LPG exports were estimated to be 859,000 mt, the highest monthly volume since sanctions imposed in 2014 and 2018.

Iranian cargoes were heard to be offered at discounts of around $10-$40/mt to the Saudi term contract prices, which were heard to have remained attractive to some LPG importers, sources said.

Over January-May, China imported 10.17 million mt of LPG, up 2.8% year on year, the customs data said.

CHINA'S LPG IMPORTS ('000 mt)

TOP TEN LPG SUPPLIERS TO CHINA ('000 mt)

*Includes other countries

*Total figures have been rounded off

Source: China's General Administration of Customs