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Demand for Seaborne LPG Higher This Year Despite Mixed Picture From Region to Region

The global LPG seaborne trade has improved this year, helping LPG shipping companies’ bottomline. In its latest weekly report, shipbroker Banchero Costa said that “global LPG trade remained fairly positive so far in 2021, despite the global impact from COVID-19. Even in 2020 total seaborne imports of LPG increased by +0.9% year-onyear to 137.5 mln tonnes, according to vessel tracking data from Refinitiv. Whilst this still represented an increase from the 2019 figure, the growth rate was significantly slower than the +4.0% increase recorded in 2019 and the +7.7% y-o-y in 2018”.

According to the shipbroker, “in the first 10 month of 2021, the trend remained similar to last year. In the period of January to October 2021, global LPG imports increased by +1.4% y-o-y to 116.0 mln tonnes, up from 114.4 mln tonnes in the same period of last year. Nevertheless, these totals mask significant differences in demand from the various importers. In Jan-Oct 2021, LPG imports to Mainland China increased by a very healthy +20.5% y-o-y to 21.9 mln tonnes. This is a significant acceleration from last year, when volumes increased by only +2.1% yo-y in the same period.

Source: banchero costa &c s.p.a.

Imports to India in Jan-Oct 2021 also increased by +2.9% y-o-y to 14.6 mln tonnes. Volumes to Japan increased by +1.5% to 8.3 mln tonnes. To South Korea they increased by +6.6% y-o-y to 6.8 mln tonnes. The only major importer which saw a significant contraction this year has been the Europe. The European Union (27) imported 17.4 mln tonnes of seaborne LPG in Jan-Oct 2021, which was a -7.1% decline y-o-y. This was quite surprising, as even last year imports into the EU increased by +2.5% y-o-y in the same period of the year. As a consequence, the EU has now been overtaken by China as the world’s top LPG importer”.

“Mainland China now accounts for 18.9% of global seaborne LPG trade, ahead of the EU27 with 15.0%. In the first 3 months of 2021, the European Union imported 5.4 mln tonnes of LPG, which represented a decline of -12.6% y-o-y on the same period of 2020, although this reflects an unusually high base in 1Q2020. The second quarter of 2021 was flat volume-wise, and saw shipments again at 5.4 mln tonnes to the EU, which however was +13.3% y-o-y compared to a very poor 2Q2020. In the third quarter of 2021, imports went down to just 4.9 mln tonnes, which was down -14.4% y-o-y from the same quarter last year, the worst quarter since the first half of 2020. Following the signing of the trade agreement with the Trump administration, China has by and large complied in vastly increasing it’s imports of American energy products, and this included LPG”, Banchero Costa said.

Source: banchero costa &c s.p.a.

The shipbroker added that “whilst LPG trade from the USA to China grounded to a halt in 2019 (it was just 0.20 mln tonnes!), in 2020 the United States emerged as the number one supplier of LPG to China with 5.28 mln tonnes. In the first 10 months of 2021, China imported 7.3 mln tonnes from the USA, up +74.7% y-o-y. Probably as a consequence, less American LPG was available to Europe. In the first 10 months of 2021, LPG imports from the USA to the EU declined by -23.5% y-o-y to 4.1 mln tonnes. The USA nevertheless remain the top seaborne supplier of LPG to the EU, accounting for 23.6% of volumes. A further 21.3% of the EU’s seaborne imports were sourced from other EU countries. This amounted to 3.7 mln tonnes in Jan-Oct 2021, up +2.6% y-o-y. Other suppliers of LPG to Europe include Algeria with 3.1 mln tonnes in Jan-Oct 2021, +13.6% y-o-y. Similar volumes come from Norway with 3.0 mln tonnes, +8.4% y-o-y. Further down the list is the United Kingdom with 1.7 mln tonnes shipped to the EU, down -5.9% y-o-y, and Russia with 0.5 mln tonnes, -46.8% y-o-y”, the shipbroker concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide

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