Market Snapshot: Evolving trends in the global trade of propane and butane

Release date: 2016-12-15

Liquefied petroleum gases (LPGs) (that is, propane and butanes) are used as fuel for appliances, home heating, and vehicles. LPGs are also an important feedstock in the production of plastics and gasoline.

Spurred by abundant new supply from the U.S., increased demand from urbanizing populations in China and India, and widespread government policies to encourage fuel switching in these and other countries, global LPG trade volumes increased 36% between 2010 and 2015.

Source and Description

Source: IHS Global LPG Outlook

Description: This line graph compares global trade volumes of LPGs by region or country. In 2009, the U.S. became a net exporter of LPGs, and in 2011 the U.S. surpassed Canada in total net exports of LPGs. The Middle East continues to the largest exporting region and export volumes have steadily grown between 2006 and 2015.

In 2015, China surpassed Japan to become the largest single importing country of LPGs, although Europe continues to be the largest importing region. South Asia and Latin America are also major importing regions.

Historically, the Middle East has been the dominant exporting region for LPGs. However, the shale gas boom in the U.S. has resulted in rapid growth of its LPG exports overseas. Facilitated by concurrent growth of LPG export infrastructure (primarily in the U.S. Gulf Coast), U.S. net exports of LPGs increased from 6 077 thousand metric tonnes (64.4 thousand barrels per day, or Mb/d) in 2010 to 21 293 thousand metric tonnes (592.5 Mb/d) in 2015. Net exports of LPGs from Canada were 2 679 thousand metric tonnes in 2015 (95.8 Mb/d), an increase from the 2 470 thousand metric tonnes (87.4 Mb/d) exported in 2014.

Major shifts are also occurring in LPG importing regions. Europe continues to be the largest importer and increased its imports by 25% between 2010 and 2015. In Asia, China surpassed Japan in 2015 as the largest importing country. Between 2010 and 2015, China increased its imports of LPGs almost four-fold, from 3 193 thousand metric tonnes to 11 903 thousand metric tonnes (from 105.0 Mb/d to 399.5 Mb/d). Over the same time frame, South Asia more than doubled its imports of LPGs from 3 885 thousand metric tonnes to 9 401 metric thousand tonnes (from 120.9 Mb/d to 292.3 Mb/d). LPG demand growth in Asia was driven primarily by rapid urbanization as well as increased Chinese demand for LPGs as a petrochemical feedstock.

Government policies are also promoting increased use of LPGs as a fuel for heating and cooking. For example, government subsidies and programs to encourage LPG use are part of India’s efforts to improve air quality by displacing kerosene and reducing the burning of biomass (for example, wood). Historically, many Latin American nations, including Mexico, have also employed government policies and subsidies for residential fuels, including some targeting LPG use.

 

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