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US propane exports strong in first half of 2020

October 9, 2020 By    

Propane was the most exported U.S. petroleum product during the first half of 2020, the U.S. Energy Information Administration (EIA) reports.

EIA chart

A reduction in Chinese tariffs on LPG stimulated exports in 2020.

U.S. propane exports averaged 1.2 million barrels per day (bpd) in the first half of 2020, an increase of 175,000 bpd (17 percent) from the same period in 2019.

EIA chart

Most propane exports head for Asian markets.

Most U.S. exports of propane are destined for use as a petrochemical feedstock, mainly by facilities in Asia and Europe. In March 2020, the Chinese government began issuing waivers for tariffs on U.S. liquefied petroleum gases, including propane. The reduction in the tariff rate helped to stimulate U.S. propane exports to Asia, EIA notes. China was the fourth-largest consumer of U.S. propane exports in the first half of 2020 behind Japan, Mexico and South Korea. On a regional basis, Asia and Oceania (which includes Japan, South Korea and China) accounted for about 683,000 bpd (56 percent) of U.S. propane exports, according to EIA. 

This stronger inclination toward Asian markets distinguishes propane from other major U.S. refined product exports, such as distillate and gasoline, the largest shares of which flow to destinations in the Americas. U.S. exports of propane to Asia and Oceania have increased since 2013 and have grown by 5,600 bpd (32 percent) since the beginning of 2019, as of June 2020, EIA adds.

Propane played a part in the U.S. exporting 5.4 million bpd of petroleum products in the first half of 2020 – up 48,000 bpd (or 1 percent) from the first half of 2019. The increase in exports occurred despite global demand declines related to impacts from the COVID-19 pandemic.

Rise in propane inventory

For the week ending Sept. 4, U.S. propane inventory stood at 97.380 million barrels, according to EIA. That put inventory at a record high for that time of year and 5.424 million barrels below its all-time high, Cost Management Solutions (CMS) notes. 

The highest propane inventory level on record was 102.804 million barrels in November 2015. With EIA’s propane/propylene inventory estimates no longer including propylene inventories held at terminals, the all-time high inventory number may seem lower than the industry might recall, CMS says. Any higher numbers would have been prior to the separation of propane and propylene from the data.

Featured photo: Suriyapong Thongsawang/iStock / Getty Images Plus/Getty Images

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About the Author:

Brian Richesson is the editor in chief of LP Gas Magazine. Contact him at brichesson@northcoastmedia.net or 216-706-3748.

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