New projects to boost China’s propnae/ethane imports in 2021-2022

Lillian Ren


SINGAPORE (ICIS)–China is expected to see a major rise in imports of propane/butane and ethane – in 2021 and 2022 to meet new demand driven by start-up of propane dehydrogenation (PDH) and steam cracker projects.

According to ICIS, a combined 7.97m tonnes/year of new PDH units and steam crackers are expected to start up by the end of 2021, and 6.65m tonnes/year by the end of 2022.

China will need to import 5.04m tonnes and 8.47m tonnes of Liquified petroleum gas (LPG)/ethane in 2021 and 2022 for those new capacities, respectively, though part of the demand will be met by domestically produced feedstock.

For PDH units, a total of 4.42m tonnes of capacity is expected to come on line by the end of 2022, raising the total PDH capacity in China to 11.13m tonnes/year.

ICIS estimates all these new PDH capacities will require 3.42m tonnes of imported propane by the end of 2022.

Most China’s PDH units depend on propane imports because domestically-produced LPG usually does not meet the requirement in terms of propane content.

For steam crackers, ethane imports will be mainly for Zhejiang Satellite Petrochemical’s cracker, whose demand is expected to reach 1.56m tonnes in 2022.

Additionally, 3.39m tonnes/year of LPG imports are expected for new steam cracker by the end of 2022 – mainly for Wanhua Chemical Group’s 1m tonne/year unit, due to come on stream in the fourth quarter of 2020.

Other LPG/naphtha-based steam crackers are mainly parts of refining & chemical complex projects located mainly in China’s seven petrochemical bases in coastal areas and will mainly consume naphtha and LPG from their own refineries.

However, growing LPG demand from the petrochemical sector over the past few years has been lending support to LPG prices and consequently dampened the profitability of LPG-based crackers in Northeast Asia and PDH units in some periods as shown in the chart below.

Light olefins variable margins in NE Asia

ICIS estimates this may make Chinese investors more cautious when planning for new crackers fed on LPG and PDH units.

Analysis by Lillian Ren


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