LPG Market Outlook Featured Article

LPG imports for Belgium fell by 25% from 2.2 MMt in 1H 2022 to 1.7 MMt in 2H 2023 on lower demand from the petrochemical sector and less incentive to substitute LPG for natural gas. LPG imports are forecast to reach 3.2 MMt in 2023 – down from 4 MMt in 2022 – and will remain around that level through 2025.

As in Asia, the European market is experiencing an oversupply of downstream petrochemical products, driving most crackers in the region to reduce run rates. Imports fell to an average of 210,000 t/m from June through August compared to an average of 300,000 t/m from January to May.

However, imports over land including those made by rail, truck or pipe have not decreased this year compared to last.

Belgium LPG Imports Forecast

While LPG imports have declined, LPG storage levels have risen to above-average highs in June 2023, with storage about 30% higher than it was in June 2022. Looking at the 5-year range, high storage levels in 2022 have led to higher storage levels this year, amid lower LPG demand.

Storage levels reached a peak of 207,000 t in August 2022. With storage levels reaching new highs already this year, it’s likely the peak seen last August will be surpassed unless demand picks up or LPG imports slow down. At this rate, storage levels are likely to be near the top end of the five-year range for all of 2023 which would lead to reduced demand for LPG imports in 2024.

Moreover, LPG demand is forecast to fall from 6.7 MMt in 2022 to 6 MMt in 2023 and remain around 6 MMt through 2025. Demand could increase higher than currently forecast, depending on the start-up timeline of Borealis’ PDH project in Kallo, Belgium. At full operating rates, the project will demand roughly 1.4 MMt/y.

Belgium LPG Storage

Global LPG prices rose in July 2023 on a tighter supply and demand balance as Chinese demand increased and Middle East supply fell. US prices rose by 10% to roughly $350/t. Prices in Asia and Europe rose at a similar rate, mirroring the movements in US prices.

Inventor y levels in the US are well above average for this time of year at around 5.7 MMt and forecast to climb higher through September to 7.5 MMt before withdrawal season starts in October.

Belgium LPG Demand