Asia demand contributes to increased US propane exports
US propane exports have been increasing in recent months, mainly to East Asian countries, thanks to cold weather and strong consumption of petrochemical feedstock in that region, according to the latest data in the US Energy Information Administration’s (EIA) Petroleum Supply Monthly.
Between April 2020 and November 2020 about 58% of all US propane exports went to Asia markets. In those months, nearly half of US propane exports were shipped to three countries: Japan, China, and South Korea.
Consumption of propane as petrochemical feedstock in East Asia has been supported by demand for propylene, a base chemical used to manufacture polypropylene.
According to China’s customs data, in 2020, Chinese exports of plastics and resins rose 15%, and the year-over-year increase reached an annual peak of 41% in November. In 2020, China’s exports of pharmaceutical preparations and supplies increased 44%.
Other factors have also contributed to the growth in US propane exports to East Asia, according to EIA.
Weather-driven demand for propane as a heating fuel increased when the La Niña weather phenomenon resulted in colder winter weather in the region.
The US has also accounted for a greater share of propane exports to Asian countries because voluntary reductions in crude oil production in Saudi Arabia have led to fewer exports out of the Middle East, which has traditionally been a major supplier for markets in Asia.
Source: Oil & Gas Journal