LPG Market Outlook: Petrochemical Demand in Asia to Rise in 2H 2023
The Northeast Asian petrochemical sector has garnered the attention of the LPG market as this winter ends. Imports for Northeast Asia, excluding Taiwan, are forecast to decline in 1H 2023 from 2H 2022 on weak heating demand in 1Q 2023 and poor petrochemical margins through 1H 2023. Imports in 2H 2022 were 23.5 MMt as opposed to a forecast of 22.6 MMt for 1H 2023 on lower-than-expected Chinese demand.
PDH units in China continue to struggle with poor margins and several PDH units have opted to start maintenance ahead of schedule. Margins for steam cracking LPG in Asia have turned positive in recent weeks, but some crackers have indicated they will still operate at slower run rates in the near term. Improved petrochemical margins and the startup of new PDH plants in China should increase demand in 2H 2023.
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