Record February LPG flows lift butane trade

Exports and imports of LPG look set to reach new highs in February, driven by demand patterns described as increasingly anchored in cargo economies that draw evenly on propane and butane, with “exports and imports of LPG likely to set record highs in February, buoyed by appetite from evenly split cargo economies”.

The report linked part of the February pull to pre-Ramadan buying, while arguing that a change in import composition is becoming more durable, “While some of that rampant demand can be chalked up to heavy Ramadan prebuying, we would contend a sea change is occurring in the import slate of the markets – one which is structural, rather than seasonal”.

The report added that this shift is associated with “growing residential usage in developing economies” connected to the energy transition.

On the supply side, the report described a widening role for butane in US exports, with more volumes directed to regions characterised by higher butane intensity, while Middle East supply growth remains active, “We have previously noted the increasing amount of butane in US exports as new capacity expansions target these economies, heightening supply competition with the Middle East, which in turn is showing sustained year-on-year export growth,” the report said.

In parallel, it said Chinese buying has moved lower, attributing the change to feedstock dynamics and petrochemical economics, “China, meanwhile, is retreating, with seasonally high naphtha usage and buckling PDH operating rates as margins remain persistently negative.”

Vortexa also flagged near-term operational and routeing effects that shaped February flows, including weather-related constraints in the US Gulf.

In competing feedstocks, the report pointed to ethane and naphtha movements that influence LPG and petrochemical feed choices and, by extension, trade direction.

The report noted that US ethane exports are on track to hit a record high in February as India ups offtake even as China retreats.