China's LPG imports are projected to see impressive growth in 2024 amid the expansion of propane dehydrogenation (PDH) and ethylene steam cracker capacities, according to OilChem.
Separately, Zhejiang Petroleum & Chemical's 600,000 t/y and Dongguan Juzhengyuan's Phase I 600,000 t/y PDH plants were restarted in early February, and Wanda Tianhong Chemical resumed the production of its 450,000 t/y PDH plant on February 20.
In addition, 5 new PDH plants, owned by Quanzhou Guoheng Chemical's with a capacity of 660,000 t/y, Fujian Zhongjing Petrochemical's Phase II 900,000 t/y, Ningbo Kingfa's Phase II 600,000 t/y, Jinneng Chemical (Qingdao) 's Phase II 900,000 t/y and Zhonghai Fine Chemical's 450,000 t/y, are expected to come on line over February-April, with a total capacity of 3.51 million t/y.
Taken together, a total of 15 million tonnes of PDH and steam cracker capacities are expected to come on line in 2024, which will lift China's LPG imports to 36 million tonnes.
In addition, China's PDH plants and ethylene steam crackers are restoring their momentum in 2024 on competitive feedstock prices.
For PDH plants, the average operating rates stood at 66.37% by February 23, up 6.35% from the prior month, data from OilChem showed, which is expected to require 1.16 million tonnes of LPG in Feberuary.
China PDH Operating Rate
Source: OilChem
The rising operating rates were due to recovering PDH processing margins as a result of lowering interntional spot LPG prices. By February 21, the average processing margin of China's PDH plants edged up to Yuan -287/t in East China and Yuan -342/t in Shandong province. If considering the added value of by-product hydrogen, the PDH processing margins have rebounded to the breakeven point, which have encouraged the PDH plant owners. OilChem thus expects that China's PDH operating rates will move up to an average of 70% in the near term.
2024 China PDH-PP Profit
Source: OilChem
As for steam crackers, the capacities have developed steadily, as new steam crackers can choose low-priced feedstock including naphtha, propane, butane, and ethane via cost calculation to ensure the optimal production. SP Chemicals increased ethane usage but cut propane usage in steam crackers, due to considerable ethane-to-ethylene production profits of around Yuan 1,000/t. Shandong Luqing Petrochemical lifted LNG usage in steam crackers as naphtha prices increased with international crude oil prices.
At present, the operating rates of steam crackers reached over 80%, with an expected LPG processing volume of 988,800 tonnes in February.
2023-2024 Steam Creaker Operating Rate and LPG Processing Volume
Source: OilChem
Written by Sunny Fang, fss@oilchem.net
Edited by Aggie Hu, huchenying@mysteel.com
