2024 China LPG Market to Witness S&D Increments
China’s LPG supply and demand will perhaps rise in 2024, and inventory may also mount up. However, most of the increases in inventory may come from the further commissioning of new warehouses. From the perspective of the balance gap, it is supposed to be largely stable, proving that the domestic LPG market is gradually shifting from relative oversupply to a balanced supply and demand, and the long-term market is relatively rational. Of course, there is still a periodic imbalance in the market, especially around the Spring Festival holiday and Q3.
China’s LPG inventory increased in recent years, and the overall LPG inventory was relatively high in 2023. It is estimated that China’s LPG inventory may further rise in the future, but the balance may decline. China’s LPG inventory may grow, mainly influenced by rising port storage capacity.
The balance may gradually decline from 2024. LPG prices were relatively low in the summer of 2023, so importers stocked up, lifting LPG inventory level. Moreover, the growth of civil-use gas demand may slow down in the future. Moreover, PDH plants may not maintain relatively high inventory at most time and may cut operating rates in the wake of sluggish profits, dragging down LPG inventory. Besides, with China’s refining-chemical integration development, most LPG resources are arranged for captive-use, and the proportion of China’s LPG commercial volume is likely to go down. Therefore, there may be tight supply-demand balance in the future, and the overall balance may enlarge, when profits at chemical plants underperform.
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