China imported 5.08m tonnes of LPG in the first four months of 2016, a large increase of about 57% year on year, according to data from the General Administration of Customs (GAC).
The significant rise was partly a result of increased demand from propane dehydrogenation (PDH) plants, because more of such units came on line as compared with the same period last year.
Oriental Energy, a major LPG importer in China, raised term cargo purchases for 2016 due to the startup of a 600,000 tonne/year PDH unit in May 2015 at Zhangjiagang, Jiangsu.
PDH enterprise Wanhua Chemical posted 278,000 tonnes of LPG imports in the first four months, versus 9,889 tonnes in the same period last year.
The company brought on stream a 750,000 tonne/year PDH unit and a 240,000 tonne/year propylene oxide (PO) unit in August 2015. It currently imports 145,000 tonnes/month of LPG on average, with a part of that for internal trade.
Additionally, healthy sales margins in the domestic market stimulated speculative imports by Chinese traders when import costs of LPG were at relatively low levels.
According to the GAC data, China’s LPG imports hit a historical high of 1.63m tonnes in March, more than doubled the year-ago level. A main reason behind the surge was speculative operation.
Some traditional LPG importers, such as Oriental Energy, increased purchases also because as they expanded business in the domestic market.
Moreover, LPG consumed for burning purpose increased in China market because it had better costs performance than alternative energies natural gas and dimethyl ether (DME).
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