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A Major Driver for LPG Sea Trade

Many ship owners have invested heavily in the LPG tanker trade. As such, India, the UAE and USA are expected to be among the main trades to generate demand. In a recent weekly report, ship owner Bancosta Research said that “India is the second largest net importer of propane and butane in the world after China. The Indian government’s push to provide clean cooking fuel to every household also in rural areas, as well as a rising population, will drive LPG consumption in the country to grow to 30.3 mln tonnes by 2025 and 40.6 mln tonnes by 2040, from 22.5 mln tonnes in 2019, according to India’s Oil Secretary M M Kutty. He said the coverage of LPG in the country has now reached close to 90 per cent, rising from about 55 per cent in 2014.

Source: Banchero Costa

According to the shipbroker, “LPG is supposed to replace traditional cooking fuels in rural kitchens such as firewood and cow dung which not only contribute to environmental degradation but also have serious health implications on users. Total propane and butane seaborne imports into India reached 20.4 mln tonnes in the 12 months of 2019, +6.2% y-o-y. This amounts to 32.9 mln cubic meters of cargo. Of total imports last year to India, 86.5% or 17.7 mln tonnes were sourced from the Arabian Gulf. The largest supplier to India last year was Qatar, with 5.6 mln tonnes. Shipments from Qatar increased by +16.9% y-o-y in 2019, with Qatar accounting for 27.3% of India’s total LPG imports”.

Banchero Costa added that “the second largest exporter were the United Arab Emirates, with 5.2 mln tonnes in 2019. Volumes from the UAE increased by +16.6% y-o-y in 2019, with the country accounting for 25.5% of India’s imports. In third place was Saudi Arabia with 4.5 mln tonnes, or 21.8% of India’s import volumes. Shipments from Saudi Arabia actually declined by -2.5% y-o-y in 2019. Further down the list we had Kuwait, with 1.9 mln tonnes in 2019, up +51.1% y-o-y. Kuwait accounted for 9.1% of India’s imports. Shipments from Oman went down -47.7% y-o-y in 2019 to 0.6 mln tonnes. Oman’s share was 2.7%. The only major exporter of LPG to India outside the Middle East are the USA”.

Source: Banchero Costa

“Volumes from the USA to India increased by +11.4% y-o-y in 2019 to 1.5 mln tonnes. Given the lockdowns imposed this year due to the Covid-19 pandemic, there has naturally been a negative impact on LPG imports, but perhaps less then expected. In the first 5 months of 2020, India imported at least 8.2 mln tonnes of propane/butane by sea, according to Refinitiv vessel tracking data. This represents a net increase of +1.4% y-o-y, compared to the 8.1 mln tonnes imported in the same five-month period of 2019. On a single-month basis, January and February 2020 were still very strong for that time of the year; +12.2% y-o-y in January 2019 with 1.8 mln tonnes, and +34.8% y-o-y in February with 1.9 mln tonnes. Things naturally went downhill from there. In March 2020, imports declined by -23.1% month-on-month to 1.5 mln tonnes, which was also -11.9% year-on-year. In April 2020, volumes went further down to 1.4 mln tonnes, -6.2% m-o-m and -17.0% y-o-y. May 2020 recorded some recovery with 1.7 mln tonnes, up +20.2% month-on-month, but still -5.1% yo-y from the 1.8 mln tonnes imported in May 2019”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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