Contraction drives more Japan LPG sector consolidation

Market: LPG
06/08/24

Further consolidation is likely as Japan's LPG demand continues to fall and the country's decarbonisation drive ramps up, writes Reina Maeda

Japan's Itochu Enex has become the latest LPG distributor in the country to consolidate its operations as a result of the long-term contraction of domestic demand, driven largely by energy efficiency gains and a shrinking rural population.

Itochu Enex established a new subsidiary Itochu Enex Homelife in July to replace the company's four regional subsidiaries in Hokkaido, Tohoku, west Japan and Shikoku. The company says maintaining a nationwide sales network has been a major challenge in the face of what it expects to be a continuing decline in domestic demand. The four regional divisions will be dissolved after the new subsidiary is set up by 1 October.

This comes after fellow distributor Astomos founded a joint venture in southeastern Fukuoka prefecture in June alongside local supplier Masuda Sekiyu. The new firm, Masuda Gas and Retailing, will supply around 10,000 t/yr to 35,500 homes in Fukuoka as well as Nagasaki, Kagoshima and Kumamoto prefectures. Astomos holds a 49pc share and Masuda Sekiyu 51pc. Astomos and its peer Japan Gas Energy (JGE) also established a joint venture named e-partner Toyamain central Toyama prefecture in April, alongside two smaller local suppliers. The new company delivers LPG to around 30,000 households. The two local suppliers each own 35pc of the firm, Astomos has 20pc and JGE 10pc.

Astomos in January chose to not renew its contract to use one of Japan's largest import terminals in Tokuyama in southwestern Yamaguchi prefecture, saying that operating the facility had become uneconomical. The terminal is owned by refiner Idemitsu, which has not said what it plans for the terminal. Astomos will use a coastal facility near the terminal that can store 4,000t of LPG, supplied by coastal vessels from other import terminals in Shikoku and Chugoku.

Further consolidation of the sector is likely as Japan's LPG demand continues to decline over the coming years. This could accelerate based on the energy, trade and industry ministry's recently announced plans to decarbonise the sector. This includes shifting consumption to around 1.4mn t/yr of "green LPG" — renewable LPG, bioLPG and renewable DME — by 2035as well as reducing usage through energy efficiency improvements, cutting demand to about 11.9mn t/yr from closer to 14mn t/yr today.

The country's LPG consumption dropped by 1pc from a year ago and by 15.4pc on the month to around 981,000t in May, the latest data from the Japan LPG Association (JLPGA) show. Sales to all sectors except the city gas sector dropped compared with a year earlier. Household/commercial sector deliveries dropped by 3.5pc to 514,600t in May, while demand from the industry and autogas sectors fell by 7.3pc to 176,600t and by 7.5pc to 27,200t, respectively. LPG sales to the petrochemical sector also fell, by 5.2pc to 145,200t in May. But demand from the city gas sector continued to grow, rising by 39pc to 117,500t, the JLPGA data show, as more is used as an additive while LNG prices are high.

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21/05/25

Mexican GDP outlook dims on tariffs: IMEF

Mexico City, 21 May (Argus) — Mexico's association of finance executives IMEF lowered its 2025 growth forecast for a fourth consecutive month, citing the growing impact of US tariffs on the economy. GDP is now expected to grow just 0.1pc in 2025, according to IMEF's May survey, down from 0.2pc estimates in April, 0.6pc in March and 1pc in February. The number of respondents forecasting a contraction in GDP rose to 16, or 37pc of the sample, from nine in April. While the US has granted some exemptions and discounts for Mexican goods meeting regional content rules, IMEF said the effective tariff rate on Mexican exports remains higher than that for Canada, Brazil, India, Vietnam and others. "We're already seeing the [tariffs'] impacts," said IMEF economic studies director Victor Herrera, adding that May trade data will likely show a sharp drop in Mexican exports to the US. Trade is also being hit by a screwworm outbreak in cattle that led to port closures last week and curtailed beef exports, which account for $1.3bn in annual exports. More automakers could relocate or scale back production in Mexico, Herrera said, after Stellantis confirmed plans to shift some operations to the US and recent reports Nissan may close one or both of its Mexican plants. In response, Mexico this week sent deputy economy minister Luis Rosendo Gutierrez to Tokyo to meet with Mazda, Nissan, Toyota and Honda executives. IMEF cut its 2025 job creation forecast to 200,000 in May from 220,000 in April. Mexico's social security administration IMSS reported only 43,500 new jobs over the past 12 months as of 5 May. Beyond trade, IMEF flagged uncertainty from recent constitutional reforms and the potential for a US tax on remittances as additional risks to growth. The group held its 2025 inflation forecast steady at 3.8pc, despite Mexico's consumer price index rising to 3.93pc in April from 3.80pc in March . IMEF noted concerns about a potential rebound in inflation later this year after the central bank cut its benchmark interest rate by 50 basis points to 9pc on 8 May — the third such cut in 2025. The group now sees the end-2025 rate at 7.75pc, down from 8pc previously. IMEF expects the peso to end the year at Ps20.80/$1, slightly lower than the Ps20.90/$1 forecast in April. The peso recently strengthened to Ps19.34/$1, though Herrera said this reflected dollar weakness more than peso strength. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Japan's Astomos, Toho Gas partner on LPG distribution

20/05/25

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20/05/25

Japan's Astomos, Toho Gas partner on LPG distribution

Tokyo, 20 May (Argus) — Japanese LPG importer Astomos and city gas distributor Toho Gas will collaborate on LPG distribution in the country's central Chukyo area to streamline distribution and facility operations. Astomos and Toho Gas' LPG sales arm, Toho Liquefied Gas, signed the agreement on 19 May. The two companies will discuss how to collaborate to strengthen tanker transport from import terminals to customers, as well as the filling of tanks and delivery functions. But specific timelines have not been decided and will be discussed, Astomos said. Toho Liquefied Gas supplies LPG to customers in the Aichi, Gifu, Mie, Shizuoka and Ishikawa prefectures. It owns storage tanks in Nagoya, with its combined propane tank capacity at 2,816t and butane tank capacity at 2,404t. The firms will also discuss how to streamline the use of these tanks, Astomos added. Toho Gas sold 474,000t of LPG in the 2024-25 fiscal year ending on 31 March, up by 1.9pc on the year, according to the firm's latest financial results. Most of this was sold by Toho Liquefied Gas. Astomos has separately partnered with fellow importer Gyxis to distribute LPG in the central Chukyo area this year, after closing one of two storage facilities in Aichi prefecture owned by Idemitsu, a shareholder in both firms. The firms will jointly use the Idemitsu Aichi LPG storage facility with a capacity of 105,000t for propane and 76,000t for butane. Astomos has also collaborated with Japan Gas Energy for LPG sales in the central Toyama prefecture since April 2024. There has been greater consolidation of business among Japanese LPG distributors because of declining domestic LPG demand resulting from a falling population, global decarbonisation initiatives including improved energy efficiency, as well as ageing LPG storages which incur maintenance costs. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump says US will soon set new tariff rates

16/05/25

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16/05/25

Trump says US will soon set new tariff rates

Washington, 16 May (Argus) — The US will unilaterally set new tariff rates on imports from select trading partners instead of holding negotiations over import tax levels, President Donald Trump said today. In the next 2-3 weeks "we'll be telling people what they will be paying to do business in the US," Trump told a group of US and UAE business executives in Abu Dhabi today. Trump contended that more than 150 US trading partners have expressed interest in negotiating with his administration, adding that "you're not able to see that many countries." Trump's administration since 5 April imposed a 10pc baseline tariff on imports from nearly every US trading partner — with the notable exception of Canada, Mexico and Russia. Trump paused his so-called "reciprocal tariffs" until 8 July, nominally to give his administration time to negotiate with foreign countries subject to those punitive rates. The reciprocal tariffs would have added another 10pc on top of his baseline tariff for imports from the EU, while the cumulative rate would have been as high as 69pc on imports from Vietnam. Trump in April suggested that 200 deals with foreign trade partners were in the works. Treasury secretary Scott Bessent has said the US is only negotiating with the top 18 trading partners. The trade "deals" clinched by the Trump administration so far merely set out terms of negotiations for agreements to be negotiated at a later date. The US-UK preliminary deal would keep the US tariff rate on imports from the UK at 10pc, while providing a quota for UK-manufactured cars and, possibly, for steel and aluminum. The US-UK document, concluded on 9 May, explicitly states that it "does not constitute a legally binding agreement." The US-China understanding, reached on 12 May, went further by rolling back some of the punitive tariff rates but left larger trade issues to be resolved at a later date. The Trump administration would keep in place a 20pc extra tariff imposed on imports from China in February-March and a 10pc baseline reciprocal tariff imposed in April. The US will pause its additional 24pc reciprocal tariff on imports from China until 10 August. Conversely, China will keep in place tariffs of 10-15pc on US energy commodity imports that it imposed on 4 February, and 10-15pc tariffs on US agricultural imports, imposed in March. It will maintain a 10pc tariff on all imports from the US that was imposed in April, but will pause an additional 24pc tariff on all US imports until 10 August. These rates are on top of baseline import tariffs that the US and China were charging before January 2025. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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France consults on expanded biofuels mandate

15/05/25

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15/05/25

France consults on expanded biofuels mandate

London, 15 May (Argus) — France has opened consultation on the transposition of part of the recast renewable energy directive (RED III) into national law, which would replace the current system with a new one called "incentive for the reduction of the carbon intensity of fuels" (IRICC). The proposal introduces two separate sets of requirements for transport fuels. The first is for greenhouse gas (GHG) emissions reductions, broken down by transport sectors — road, aviation, maritime, LPG and natural gas for vehicles, which could be CNG or LNG (see table). In the current draft, the GHG reduction target for the road sector will start at 5.9pc in 2026, rising to 10.6pc in 2030 and 18.7pc in 2035. For aviation, the target starts at 2.5pc in 2026, rising to 5.8pc in 2030 and 18.8pc in 2035. The GHG mandate levels include a gradual phasing-in of new fuel sectors – river and maritime fuels, fuel gasses, and aviation. To meet the overall RED III target of 14.5pc emissions reduction by 2030, the national French target includes the biofuels mandates, a share for rail transport, and a share or private vehicle charging. The second set of requirements is a renewable fuel requirement by energy content, which is broken down by fuel type — diesel, gasoline, LPG and natural gas fuels and marine fuel (see table). The blending requirements for diesel start at 9pc in 2026, rising to 11.4pc in 2030 and 16pc in 2035. For gasoline, the mandates start at 9.5pc in 2026, rising to 10.5pc in 2030 and 14.5pc in 2035. Finally, the proposal includes a set of sub-mandates for advanced fuels and renewable hydrogen . The advanced biofuels mandate would start at 0.7pc in 2026, rising to 1.95pc in 2030 and 2.6pc in 2035. Users of renewable fuels of non-biological origin (RFNBOs) would not be subject to the advanced sub-mandate. In feedstock restrictions, the crop cap will rise to 7pc from 6.2pc in 2030 and 2035, while the limit for fuels made from feedstocks found in Annex IX-B of RED will be at 0.6pc in 2026, 0.7pc in 2030 and 1pc in 2035 for diesel and petrol. Aviation fuel will not have a IX-B cap until 2030, and from then it will be 6pc. Mandate compliance would be managed by a certificate system through the CarbuRe registry, with a compliance deadline of 1 March the following year. Public electric vehicle charging would also generate tickets, although the amount of tickets generated by charging light passenger vehicles would be reduced from 2031 to reach 50pc in 2035. Renewable hydrogen used in transport would also generate tickets counting towards the hydrogen sub-quota and reduce the overall GHG savings requirement. Public charging stations will start generating fewer tickets for electric passenger vehicles from 2031 to 50pc by 2035. France is also considering steep penalties for non-compliance, at €700/t CO2 not avoided for the GHG reduction requirement and at €40/GJ for the fuel targets. The penalty for not meeting hydrogen and advanced fuel sub-targets would be doubled, at €80/GJ. The consultation is open for comments until 10 June. By Simone Burgin Proposed GHG reduction by transport sector % 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Road and non-road diesel 5.9 7.1 8.3 9.5 10.6 13.2 14.8 16.2 17.5 18.7 Aviation 2.5 3.3 4.1 4.9 5.8 8.4 10.8 13.3 15.9 18.7 RFNBO sub-target (% en.) 0.0 0.0 0.0 0.0 1.2 1.2 2.0 2.0 2.0 5.0 Maritime 2.5 3.25 4.0 5.0 6.0 7.0 8.0 10.0 12.0 14.5 RFNBO sub-target (% en.) 0.0 0.0 0.0 0.0 1.2 1.2 1.2 1.2 2.0 2.0 LPG and natural gas fuels 0.0 0.0 2.7 6.3 10.6 13.2 14.8 16.2 17.5 18.7 DGEC Proposed energy content mandate by fuel type % (en.) 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Diesel 9.0 9.5 10.1 10.7 11.4 12.2 13.0 13.8 14.9 16.0 Petrol 9.5 9.7 10.0 10.2 10.5 11.1 11.8 12.6 13.4 14.5 Natural gas fuels 0.0 0.0 3.0 7.0 12.0 15.0 16.0 18.0 19.0 21.0 LPG 0.0 0.0 3.0 7.0 12.0 15.0 16.0 18.0 19.0 21.0 Marine fuel 2.9 3.8 4.7 5.9 7.1 8.2 9.4 11.8 14.1 17.1 DGEC Proposed caps and sub-targets % (en.) 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Feedstock caps Crop feedstocks 6.2 6.4 6.6 6.8 7.0 7.0 7.0 7.0 7.0 7.0 Annex IX-B feedstocks* 0.6 0.6 0.65 0.7 0.7 0.75 0.8 0.85 0.9 1.0 Cat. 3 tallow 0.5 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 Tall oil 0.1 0.1 0.1 0.1 0.15 0.15 0.15 0.15 0.15 0.2 Fuel sub-targets Advanced feedstocks 0.7 0.95 1.25 1.6 1.95 2.0 2.1 2.25 2.4 2.6 RFNBOs/Renewable hydrogen 0.05 0.2 0.5 1.0 1.5 1.6 1.7 1.8 1.9 2.0 *For diesel and petrol Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Q&A: Braskem Idesa Mexico terminal to feed cracker

14/05/25

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14/05/25

Q&A: Braskem Idesa Mexico terminal to feed cracker

Mexico City, 14 May (Argus) — The new ethane storage terminal owned 50:50 by Brazilian-Mexican JV Braskem Idesa and the Netherlands-based Advario will be fully operational by mid-July, when the Etileno XXI cracker returns from a full-stop maintenance program, said Cleantho Leite, chief executive of Terminal Quimica Puerto Mexico (TQPM), in an interview with Argus. Edited highlights follow. What does the new terminal represent for Braskem after years of limited ethane supply? TQPM solves a long-standing ethane supply shortage in Mexico, which remains one of the largest ethane consumers in the region. Under the previous supply contract with Pemex, we did not have full supply. It was like having an F1 car with only 70pc of its fuel — eventually, we would run out of supply before even completing the race. Now, thanks to this terminal, Braskem can import the ethane it needs from the US to ensure consistent operations. Of course, we will continue buying from Pemex whenever possible, as its ethane remains the most cost-effective solution. But with this infrastructure in place, we are no longer tied to a single supply source. When will the terminal begin operating at full capacity? We are currently in pre-operational stages, and commercial operations are expected to begin by late May. Then, the Braskem complex will enter its scheduled maintenance shutdown. Once it resumes in mid-July, we will begin transitioning to full utilization of the terminal. The facility is fully capable of covering up to 100pc of Braskem's demand. In fact, it was designed with a 25pc buffer — excess capacity that could support future expansions. The equipment is ready, and whether we go from 75pc to 100pc in 15 days or in a month will depend entirely on Braskem's operating strategy. What is going to happen with the ethane Pemex no longer uses? For now, I do not see Pemex's own complexes significantly increasing their consumption of ethane. It is not like they will double their intake overnight. At least during 2025, Pemex is still in the process of reactivating its own crackers, so that volume will remain available to Braskem. If Pemex eventually requires more supply, it has its own import terminal. Alternatively, it could request capacity from TQPM if needed. Also, Braskem has long-term contracts that allow flexibility in adjusting volumes. If there is unused ethane in a given month, we can resell it to other locations. That has always been part of our strategy. The Braskem group, through Braskem Trading and Shipping, has consistently found alternatives for any surplus. Do you foresee any regulatory or permitting issues under the new legal framework in Mexico? No. We already hold all relevant permits from the now-defunct energy regulator CRE, which are now under the authority of the new CNE. That means no additional permits are required for the terminal under the new framework. Furthermore, the open-access guidelines established by the CRE are still valid and will be used by the CNE to issue and manage permits. The only other authorizations we need are from customs, which have not hindered pre-operations. Historically, the CRE reviewed transportation tariffs every five years, and we expect the CNE will follow the same regulatory schedule. What is the outlook for Braskem's crackers in Brazil regarding a transition to ethane? In Brazil, Braskem currently operates four crackers — three based on naphtha and one, in Rio de Janeiro, on ethane. The company is studying a broader shift toward ethane to reduce dependence on naphtha. Shipments to Brazil would follow a similar model to what we are doing in Mexico, with contracts signed with US suppliers. Our Salvador Bahia plant already receives ethane occasionally, using vessels that take roughly 12 days to arrive. Mexico has a geographical advantage — just two days away from US ethane. What are the long-term plans for TQPM? Our immediate focus is stable operation and efficiency. Long term, the terminal is well located in the Interoceanic Corridor and could serve future industrial projects. We have space and docking infrastructure to add tanks for chemicals, ammonia or propane. Nothing is confirmed yet, but in 3–4 years we expect opportunities to emerge. By Édgar Sígler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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