2023 China LPG Loading May Notch a New High
The loading volume of pressurized vessel was 811kt in Q3, 2023, down 102.1kt or 11.18% from Q2, 2023 and down 169.1kt or 17.25% Y-O-Y. It is estimated that the loading volume in Q4, 2023 may be slightly higher than that in Q3 but may be lower than that in Q2. SCI reckons that the overall loading volume will probably reach 3,404.6kt in 2023.
The overall LPG loading volume went down in Q3, 2023, as some refineries cut the loading volume. The overall downstream procurement went up with rising prices, so sellers arranged more LPG resources for local trading. China’s LPG prices kept dipping in Q2, 2023 and bottomed out in July. However, the overall LPG prices remained low in July and August. Entering September, China’s LPG prices hovered at highs, and most downstream users maintained high inventory before the National Day holiday.
Moreover, some refineries arranged more LPG resources for captive-use. From June to August, the price spread between LPG and naphtha even surpassed RMB 500/mt. China’s LPG prices hovered at highs in September, so the price advantage against naphtha slightly weakened. SCI learnt from the market that one refinery in Central China and one refinery in South China cut its LPG consumption from crackers, and some refineries in East China still take LPG as their cracking feedstock.
With price advantage waning, refineries may raise the LPG commercial volume. Moreover, the civil-use gas demand will probably gradually improve in winter, dragging down the loading volume. Overall, it is estimated that the loading volume in Q4, 2023 may be slightly higher than that in Q3 but may be lower than that in Q2. SCI reckons that the overall loading volume will probably reach 3,404.6kt in 2023, notching a new high.
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