China imported 1.44 million mt of LPG in December, up 13.5% from November, but down 9.3% year on year, the latest data released by the General Administration of Customs showed Friday.
A combination of lower import price, better cracking margins at propane dehydrogenation plants and firm winter demand from household users was believed to have encouraged Chinese importers to bring in more LPG cargoes in December, market sources said.
Saudi Aramco set its December Contract Price for propane at $445/mt on an FOB basis, down 18% from November. Spot refrigerated propane cargoes on a delivered basis to China were estimated to have dropped by 6% from November, S&P Global Platts calculations showed.
As a result, Chinese PDH plants were estimated to have enjoyed a theoretical processing margin of Yuan 1,935/mt ($281.08/mt) in December, up 8% from November, Platts reported earlier.
Separately, China imported around 1 million mt of propane in December, up 13.9% from November, but down 12.1% year on year. Butane imports were 402,438 mt in December, up 14.6% month on month, but down 0.5% year on year.
Over January-December, China imported around 19 million mt of LPG, up 3% year on year. Propane imports edged up 0.8% year on year, while butane imports rose 9.4%, the customs data revealed.
Platts calculates China’s LPG imports by adding the propane and butane figures to those for “other LPG” under HS code 7111990. This is to reflect China’s imports 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. Imports and exports of “other LPG” are much lower than that of propane and butane.
In December, Saudi Arabia overtook the UAE, Qatar and Kuwait to become the biggest LPG supplier to China at 292,931 mt, up 167% month on month. Qatar was the second biggest LPG supplier to China in December at 279,250 mt, up 28% month on month.
Meanwhile, LPG imports from the UAE fell to the third place at 243,715 mt in December, down 20% month on month, though the country remained the top LPG supplier to China over 2018 at 4.54 million mt, the customs data showed.
Industry sources said that the 2018 volumes from the UAE probably included cargoes from Iran, because China has been the main buyer of LPG from Iran, but the volumes were not reflected in China’s public data.
LPG loadings from Iran in November almost ground to a halt following the reimposition of US sanctions on November 4, with only one cargo slated for China, down significantly from a total loading of 370,400 mt in October and 524,000 mt in September, Platts reported previously.
LPG imports from the US were still almost zero in December due to the ongoing trade war between the two countries.
In 2018, China imported around 1.61 million mt of LPG from the US, down 54% from around 3.5 million mt in 2017, accounting for 8% of the country’s total LPG imports. In 2017, the US was the second-largest LPG supplier to China, and accounted for 19% of the country’s total LPG imports, Platts calculations based on the customs data showed.
Source:Platts
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