The opening of several petrochemical units in the region will increase the number of LPG imports, putting added pressure on terminal operators
South China's LPG import terminals that serve the residential and commercial sectors saw their intake decline last year as a result of increasing availability of lower-priced LNG and refinery LPG. This raised re-exports to clear inventories as well as spur rationalisation in the sector. And the pressure could mount in 2025 with imports due to grow as new LPG-fed petrochemical units open.
South China is where most of the country's non-petrochemical sector use is concentrated. Imports of LPG to the region's wholesale terminals — which serve the regional market by delivering LPG to bottling plants before being distributed to residential and commercial retailers — dropped by 9pc to about 5.3mn t in 2024, data from Kpler show, as a result of LPG's heating market share losing ground to natural gas, supplies of which have been furnished by LNG imports.
The wholesale terminals became less competitive last year partly owing to cheaper LNG arriving in the region as well as surging LPG production from refineries. Trucked LNG prices in Guangdong averaged 4,841 yuan/t ($672/t) in 2024, while the Pearl River Delta index for trucked LPG from terminals in the province's Guangzhou, Zhuhai and Shenzhen cities averaged Yn5,097/t in 2024.
South China's LPG demand for heating fell by about 20-25pc last year, market participants say. This came as regional refineries increased LPG output by about 28pc to 8.88mn t in January-November, National Bureau of Statistics data show, which was linked to flagging sales of gasoline pushing plants to produce more LPG for integrated petrochemical production. The price of LPG truck cargoes from Guangzhou refinery in Guangdong averaged Yn5,006/t in 2024, with cheaper supply from two refineries leading to a twofold increase in bottling plants that bought from the facilities instead of import terminals.
Terminal operators tried to tackle the challenge of cheaper competing LNG and refinery LPG supply by exploring overseas markets for lower-priced LPG and reducing trading operations. This was reflected in imports to the region from Iran rising by 12pc to 3.8mn t in 2024, raising Iran's share of the south Chinese import market by 13 percentage points to 70pc, Kpler data show. Iran's LPG was sold at heavy discounts compared with other Mideast Gulf suppliers owing to US sanctions on the country and vessels carrying its energy and petrochemical products.
Warm squeeze
Some of south China's larger terminals chose to re-export their LPG to ease inventory pressure, with shipments reaching a record high of 1.1mn t in 2024, up by 28pc from 2023. Butsmaller terminals had to cut imports as the heating market was squeezed, including facilities in Nansha and Raoping, Guangdong, where arrivals almost halved to 178,600t and 365,700t, respectively. Another option was divestment. Private-sector LPG and petrochemical firm Oriental Energy said in December that it agreed to sell 55pc of its Guangxi Tiansheng terminal to neighbouring Guangxi Haichuan Energy in Qinzhou. Oriental Energy has been actively selling its LPG assets recently, offloading its bottling plants in Guangxi that are downstream of the Tiansheng terminal, market participants say.
These challenges for terminal operators are likely to persist this year as more LPG arrives in the region, which will welcome two new LPG import terminals in 2025 to meet feedstock demand for a 1.6mn t/yr ethylene cracker in Huizhou and a 1.2mn t/yr cracker in Zhanjiang. The latter terminal will sell excess LPG to the domestic wholesale market when it begins receiving cargoes, local traders say.
Integrated refineries in south China are also expected to continue ramping up LPG production prior to opening their linked downstream petrochemical units over the coming two years. This include the Sinopec Maoming Petrochemical plant, which is due to bring a 1mn t/yr naphtha and LPG-fed cracker on line by 2027.


