Liquefied petroleum gas Prices, markets & analysis
When importing, exporting or trading liquefied petroleum gas (LPG), it is essential to have access to up-to-date pricing information and analysis on developments.
Our network of reporters and analysts follow the LPG markets closely and publish their insights in comprehensive price and market reports, providing you with all the information you need to track the latest developments and use our prices for your contracts, deals and negotiations.
Liquefied Petroleum Gas Overview Transcript
Liquefied petroleum gas or LPG is a mixture of propane and butane. LPG is a by-product of crude oil refining or it can be extracted from oil or it can be synthesised as part of the process of making ethylene from light oil or light hydrocarbons.
LPG is a low carbon emitting and low polluting fossil fuel. It has a high calorific value and is easily stored. This makes LPG a good fuel for cooking or heating or as an industrial feedstock.
Residential consumption accounts for 54% of China’s domestic consumption. Industry consumes around 30% of China’s LPG. Commercial applications use around 30% and the automotive sector uses about 4%.
In China domestic LPG is mostly produced in refineries with about 14% imported, mostly into south and east China.
The Chinese LPG market is not regulated and price depend on supply and demand which means that it changes frequently.
It faces pressure in the heating market from the expanding natural gas market and it is transitioning into a feed gas for further petrochemical processing.
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Liquefied petroleum gas: Market overview
More and more LPG (liquefied petroleum gas) is produced from gas fields rather than oil fields, even though refineries remain the biggest source of LPG. Thus, more propane will be produced compared to butane. Middle Eastern producers mostly sell LPG to Asian countries, while North Sea and African producers sell cargoes to Northwest Europe and the Mediterranean. US producers sell cargoes to South America or Europe but are trying to transport more cargoes to Asia, which would impact the Asian market.
Increasing oversupply and falling international crude prices caused LPG prices to plunge to a six-month low after hitting a record high. International crude oil prices play a key role in world LPG prices. Supply and demand for LPG also cause market fluctuation.
Most LPG is used as household heating fuel but the market is currently transitioning to feed gas. More and more LPG has been used as feedstock in recent years to make different kinds of chemical products.
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About Liquefied petroleum gas
LPG is a kind of colourless, odourless gas. Varieties of LPG bought and sold include mixes that are primarily propane (C3H8), primarily butane (C4H10) and, most commonly, mixes including both propane and butane. Propylene, butylenes and various other hydrocarbons are usually also present in small concentrations. A powerful odorant, ethanethiol, is added so that leaks can be detected easily. LPG is not toxic but there are two main hazards. The first are possible explosions if there is an ignition source. The second is suffocation due to LPG displacing air, causing a decrease in oxygen concentration.
LPG is synthesised by refining petroleum or "wet" natural gas and is almost entirely derived from fossil fuel sources. It is manufactured during the refining of petroleum (crude oil), or extracted from petroleum or natural gas streams as they emerge from the ground.
LPG is mainly used as household, commercial and industrial fuel, auto gas, and petrochemical feedstock.
In 2011 most LPG in China was used as household fuel, 54.3% in total. Industrial demand comprised 31.1%, including traditional industrial use and petrochemical feedstock use. Commercial demand accounted for 12.2% while the remaining 2.4% was used for auto gas.