China LPG plants' inventory climbs on supply surges

LPG producers' in-plant inventory rate increased to 31.47% by January 18, 2024, up 3.77 percentage points compared to 27.5% before the New Year's Day and 6.7 percentage points higher from 24.77% a year ago, data from OilChem showed.

The supply remained the leading factor influencing the plants' inventory. Domestic LPG production reached 590,800 tonnes by the week ended January 18, up 2.6% compared with last week, as some refineries such as Sinopec Qilu Petrochemical, PetroChina Ningxia Petrochemical, and Sinopec Changling Company ramped up the production. At the same time, the imported LPG arrivals this month surged 41.77% month-on-month.

Insufficient domestic demand served as another cause for higher inventory levels. The demand from both burning and chemical sectors remained lackluster during the traditional peak season. Specially, the PDH capacity utilization rate reached a lowest of 55.03% by January 18 due to serious production losses. Meanwhile, lower imported LPG costs and falling domestic LPG prices were clearly taking a toll on buyers' confidence.

With the Chinese Lunar New Year approaching, downstream enterprises and end-uers may replenish LPG stocks to cope with the peak demand during the national holidays, and upsteam LPG plants will also actively liquidate stocks before the holidays to maintain low inventory levels. Therefore, OilChem expects that the LPG plants' inventory will decrease in the near term.

China LPG Plant Inventory and Price

Source: OilChem

PDH Plants' Capacity Utilization Rate

Source: OilChem

Written by Sunny Fang, fss@oilchem.net  
Edited by Aggie Hu, huchenying@mysteel.com