Generic Hero BannerGeneric Hero Banner
Latest market news

S China LPG terminals face LNG, refinery competition

  • Market: LPG
  • 21/01/25

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.

Trucked LPG/LNG prices in Guangdong

S China wholesale terminal imports

S China LPG imports by origin, 2024

Sharelinkedin-sharetwitter-sharefacebook-shareemail-share

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News
13/02/25

Sanctions complicate Syria’s access to crude, products

Sanctions complicate Syria’s access to crude, products

Dubai, 13 February (Argus) — Syria is struggling to secure crude and refined oil products through public tenders because shipowners remain cautious about sending vessels there in case they are detained, traders say. Syria's transitional government issued tenders seeking 4.2mn bl of crude, 80,000t of 90 Ron gasoline and 100,000t each of fuel oil and gasoil last month — the first since the fall of Bashar al-Assad's regime in December last year. The tenders closed earlier this month after minimal participation from trading firms and were mostly awarded to local companies which will effectively act as intermediaries, market participants said. Market participants have hinted to Argus that small and medium-sized Turkish firms were likely on the list of bidders . But the delivery of the cargoes is under threat, with shipping companies avoiding the route over concerns about tankers being "sanctioned or stranded". Last month the US waived sanctions prohibiting energy trade with Syria, but the country is still under EU and UK sanctions, which could have narrowed the pool for bidding, although EU foreign ministers have agreed on a roadmap to ease restrictions. The bidding pool was also limited by a clause in the tender document that noted "the seller should not have any direct or indirect trade relations with any country that is in war with Syria", a market source said, adding that this could have discouraged some companies from taking part. Before Assad's removal, Syria relied heavily on Iran for crude and product supplies. But Tehran — the Assad regime's closest ally — ceased shipments after the Islamist group Hayat Tahrir al-Sham took control last month, leaving the new transitional government under pressure to find alternative suppliers. Neighbouring Arab countries are stepping in to help the new government deal with acute fuel shortages. State-owned Jordan Petroleum Refinery Company has begun exporting around 500 t/d of LPG to Syria. The ministry also issued two LPG import tenders seeking a total of 86,000t, but the winner has not been confirmed By Rithika Krishna Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more
News

Feyzin bitumen output halted as part of wider stoppage


11/02/25
News
11/02/25

Feyzin bitumen output halted as part of wider stoppage

London, 11 February (Argus) — Bitumen production at TotalEnergies' 109,300 b/d Feyzin refinery near Lyon, central France, is halted from 10-20 February as part of a wider shutdown affecting the refinery's crude distillation unit (CDU) and reformer. Workers at the plant said last week there had been unexpectedly extended CDU works caused by a blockage by unspecified debris . TotalEnergies said at the time it would not comment on operations. Officials at the company confirmed today the CDU and reformer were among units shut at Feyzin, but said the halt was planned. They said the CDU had suffered no unexpected blockage or damage. Workers reiterated today that debris had been detected in the CDU and that this could result in a shutdown lasting weeks. Sources familiar with the refinery's operations said today that the bitumen halt would cause no supply disruptions in terms of the usual truck movements, with sufficient stocks held at the plant to meet current low-level requirements during the winter slow activity period in the road paving and other construction sectors. By Fenella Rhodes and Adam Porter Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Mexico inflation slows to 4-year low in January


10/02/25
News
10/02/25

Mexico inflation slows to 4-year low in January

Mexico City, 10 February (Argus) — Mexico's consumer price index (CPI) eased to an annual 3.59pc January, the lowest in four years, as deceleration in agriculture prices offset faster inflation in energy and consumer goods prices. This marks the lowest annual inflation since January 2021 and a significant slowdown from July's annual peak of 5.57pc, which was driven by weather-impacted food prices. The result, reported by statistics agency Inegi on 7 January, was slightly below than the 3.63pc median estimate from 35 analysts polled in Citi Research's 5 February survey. It compares with the 4.21pc headline inflation in December, marking five months of declines in the past six months. Mexican core inflation, which excluded volatile energy and food, sped slightly to 3.66pc in January from 3.65pc in December, while non-core inflation decelerated to 3.34pc from 5.95pc the previous month. Movement, in the non-core, said Banorte, was mostly explained by a positive basis of comparison, and "will reverse as soon as the second half of February to push the headline metric above 4pc," said Banorte. Core inflation accelerated slightly to 3.66pc in January from 3.65pc in December, marking the second uptick after 22 consecutive months of deceleration. Services inflation slowed to 4.69pc from 4.94pc, while consumer goods inflation ticked up to 2.74 from 2.4pc. Non-core inflation slowed sharply to 3.34pc from 6.57pc in December. This was largely due to base effects, Banorte said, adding these base effects are likely to fade this month to speed headline annual inflation back above 4pc. The base effects most clearly impacted fruit and vegetable price inflation, contracting 7.73pc in January from 6.65pc annual inflation the previous month. Moving forward, agriculture prices are highly exposed to the coming hot, dry season in Mexico, with the La Nina climate phenomenon, adding a layer of uncertainty. Meanwhile, energy inflation accelerated to 6.34pc in January from 5.73pc the previous month, driven by higher LPG prices. Electricity inflation, meanwhile, sped to 4.32pc in January from 2.65pc in December, while inflation slowed to 0.02pc in January for domestic natural gas prices from 5.67pc in December. Monetary policy The January inflation report followed the central bank's decision Thursday to reduce its target interest rate to 9.50pc from 10pc. This was the bank's sixth rate cut since March 2024, winding down from 11.25pc. The 4-1 decision marked an acceleration in the current rate cycle, opting for a half-point reduction rather than the previous five 25-basis-point cuts. In board comments with the announcement, the bank cited "significant progress in resolving the inflationary episode derived from the global shocks" in 2021 and 2022. These triggered rate hikes from 4pc in June 2021 to 11.25pc in April 2022, the target rate's historic high. Taking into account the "country's weak economic activity" and this progress in reducing inflation, the board said it would "consider adjusting [the target] by similar magnitudes" at upcoming meetings. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Australia's Beach cuts FY24-25 oil, gas output target


06/02/25
News
06/02/25

Australia's Beach cuts FY24-25 oil, gas output target

Sydney, 6 February (Argus) — Australian independent Beach Energy has narrowed its oil and gas output guidance for the year to 30 June 2025, given delays in bringing the Western Australian (WA) 250 TJ/d Waitsia gas plant on line. Beach will produce 18.5mn-20.5mn bl of oil equivalent/d (boe/d) in 2024-25, it said in its half-year results to 31 December. It revised the top end of its previous forecast of 17.5mn-21.5mn boe down because of delays at Waitsia, which is operated by joint venture partner Japanese trading house Mitsui. Beach has maintained its guidance for first sales gas at Waitsia in April-June. The Adelaide-based firm last month reported its output at 10.2mn boe in July-December 2024, 15pc higher on the year, leading Beach to raise the bottom end of its guidance. The five Waitsia LNG swap cargoes that Beach has executed to date have brought forward revenue for the firm, which reported A$139mn ($87.1mn) from the two shipped in July-December 2024. A fifth cargo was lifted from Australian independent Woodside Energy's 14.4mn t/yr North West Shelf (NWS) LNG terminal in January, while a possible sixth may occur before the end of June. "We have opportunities for additional swaps in the market and we're looking very closely… I'm hoping to get another [cargo] out before the half-year," chief executive Brett Woods said on 6 February. About 35pc of the gas exported via swap cargoes to date were from Beach's own 20 TJ/d (534,000 m³/d) Xyris gas plant, meaning it will not need to be swapped back, Woods said. Beach expects 8-10 cargoes/yr of Waitsia gas to be shipped until 2028, with scope to further extend the project's LNG exports following the WA government's changes to onshore gas export rules. Waitsia partners hold a gas processing agreement with the NWS JV running until the end of 2028. Beach will start its Offshore Gas Victoria programme in 2025 as part of its ambition to become a major domestic gas supplier. This includes drilling the Hercules gas prospect in Victoria state's offshore Otway basin in April-June, described as a "large scale opportunity" with prospective reserves of 100bn ft³ (280mn m³). No change was made to Beach's 2024-25 capital expenditure guidance of A$700mn-$800mn. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

India’s LPG use could contract after record 2024


04/02/25
News
04/02/25

India’s LPG use could contract after record 2024

Consumption is expected to fall as more households take up piped natural gas and LPG subsidies are unwound, writes Rituparna Ghosh Mumbai, 4 February (Argus) — India's LPG consumption may contract this year after reaching another record high in 2024 unless new demand centres for use as a clean cooking fuel emerge, budget documents show and industry officials say. Urban use of LPG as a cooking fuel in India is likely to be further eroded this year by the development of piped natural gas grids while rural sales could be affected if the government decides to remove subsidies. Households account for over 90pc of India's LPG demand. India's overall LPG consumption rose to a record high of 31mn t in 2024, up by 7pc on the year, according to oil ministry data, on the back of an election year that prompted several LPG incentives from the ruling BJP party. The government's target of adding 7.5mn more low-income households under the Pradhan Mantri Ujjwala Yojana (PMUY) subsidy scheme a year ahead of schedule also supported the growth. A total of 329mn households use LPG as of 1 January, government data show. India's LPG imports increased by 13pc to a new high of 21mn t in 2024 on growing consumption and flat production of about 12.8mn t. LPG use in urban areas is expected to contract as piped natural gas (PNG) becomes increasingly available, with household connections rising by 16pc to nearly 14mn last year, according to the oil ministry. PNG for households is subsidised by the government. Delhi expects the rural sector to drive demand growth as more users switch from harmful solid biomass fuels to LPG for cooking. But households that have switched fuel often return to cheaper firewood — a government survey shows that less than half of India's rural households use LPG for cooking, with the annual cylinder refill rate stagnating at three/yr since 2022. The government also plans to reduce LPG subsidies in its latest budget for 2025-26 beginning in April. Subsidies for low-income households will fall by 28pc to 91bn rupees ($1.04bn) in the next fiscal year from Rs127bn in 2024-25. India's overall LPG subsidy declines to Rs121bn from Rs147bn. The decline in subsidies will hurt LPG demand in price-sensitive areas — nearly 129mn people in India were living in extreme poverty in 2024, according to a World Bank report. No poll pull Elections are a major demand driver for LPG in India as federal and state governments often reduce rates or offer free refills during their campaigns. State-run refiners slashed 14.2kg cylinder prices by Rs100/cylinder in August last year to Rs803/cylinder ($9.20/cylinder) in Delhi, where they have remained since. LPG subsidies of Rs300/cylinder were also extended for low-income households, which is due to expire in March. Several state elections in late 2023 announced free cylinders, boosting demand for LPG throughout 2024. But the government may now look to wind down subsidies with no critical elections to contest in the near future, as it did after the 2019 election. Increasing government repayments due to state-run refiners for lowering prices may also force it to raise cylinder prices again, analysts say. The government made no provision in its budget proposal to compensate the refiners for losses incurred in selling domestic LPG to households at below cost. The losses accrued by refiners IOC, BPCL and HPCL from LPG sales during the April-December 2024 period are estimated to be around Rs285bn combined, according to their company reports. This would equate to Rs390bn for the entire fiscal year 2024-25. The oil ministry meanwhile forecasts India's LPG consumption to grow by 4.7pc on the year to 33mn t in 2025-26. India kept 14kg LPG cylinders at Rs803 in Delhi for a 10th consecutive month for January but cut commercial 19kg cylinder rates after five straight months of hikes by Rs14.50 to Rs1,804, according to state-run refiner IOC. India LPG fundamentals Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more