According to ESAI, energy experts predict that 2018 will end with the oil market in surplus. The surplus could increase in 2019 but OPEC+ will put together a deal to cut production and lift prices. Regions like China are expecting to rebound.
China LPG Imports to Rebound
Liquefied Petroleum Gas (LPG) imports from China is predicted to rebound in 2019 after dismal growth of a little over 20,000 b/d in 2018, according to ESAI Energy’s newly published Global LPG Outlook.
LPG is a type of fuel consisting of hydrocarbon gases in liquid form.
A new wave of PDH investment will reignite Chinese demand. In a market flush with new supply, exporters will count on an uptick in Chinese demand to stave off a global glut.
Propane dehydrogenation (PDH) is a process step in the production of propylene from propane. PDH is vital to the petrochemical industry: propylene is the second most important starting product in the petrochemical industry after ethylene.
After a lull in Chinese Propane dehydrogenation investment, a new round of projects will breathe life into Liquefied Petroleum Gas demand growth next year, according to ESAI Energy.
In the past 18 months, there were only two small additions to Chinese PDH capacity totalling 215 thousand MT of propylene, which has a negligible impact on propane use.
ESAI Energy expects China, which currently has 5.9 million tons of PDH capacity, to bring online another 2.2 million tons between now and the end of 2019.
“China’s annual growth stumbled to less than 60,000 b/d in 2018 from an average 165,000 b/d in the previous four years,” explains ESAI Energy Head of Global NGLs Andrew Reed. “Unless Chinese demand picks up in 2019, global growth will decelerate considerably. In an environment of robust supply, that would result in a tremendous glut. However, we believe Chinese growth will get back to 100,000 b/d next year.”
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