LPG Trade: The US Market Dominated During 2020
According to Banchero Costa, “LPG trade remained fairly positive in 2020, despite the global economic impact from COVID-19. However, we need to stress that there has been a big difference between the performance of the USA and the rest of the world. In 2020, the Rest of the World (excluding the USA) exported just 94.8 mln tonnes of LPG. This represented a -8.9% decline y-o-y, from the 104.1 mln in 2019. In particular, volumes coming out of Saudi Arabia were down -17.2% y-oy in 2020, at 7.6 mln tonnes. Shipments from the USA have been fairly regular this year, without much seasonality being seen. Year-on-year changes seem quite volatile but this reflects more the ups and downs seen in 2019. In the first 3 months of 2020, the USA exported 11.6 mln tonnes of LPG, up +35.7% y-o-y. However this percentage reflects more the poor volumes of early 2019 than the strength of 2020. The second quarter of 2020 saw shipments of 11.3 mln tonnes from the USA, up +6.5% y-o-y. In the third quarter, imports ticked upwards to 11.8 mln tonnes, which was up +9.9% y-o-y from the same quarter in 2019. The peak of the year was October 2020, with 4.5 mln tonnes of LPG shipped from US ports, up +16.3% yo-y, and an all-time record:.”
The shipbroker added that “overall, the fourth quarter clocked in at 12.4 mln tonnes, up +13.2% y-o-y. LPG production and exports from the US are driving shifts to the global trade patterns – incremental US exports have moved to Asia. When the trade war between the US and China escalated two years ago, and then as the two countries agreed to a phase one of a bilateral trade agreement, the flows of trade also shifted as a consequence. In 2020, the USA exported 5.2 mln tonnes of LPG to China. This was a stunning reversal from the low of just 0.3 mln tonnes seen in 2019. On the other hand, the U.S. have slightly reduced their LPG exports to Japan and South Korea. Exports to Japan, which was the top destination for U.S. LPG in 2019 with 6.9 mln tonnes, declined by -15.9% y-o-y in 2020 to just 5.8 mln tonnes.
At the same time, 5.5 mln tonnes of LPG were exported from the USA to South Korea in 2020, a drop of -15.5% y-o-y. Surprisingly, exports to the European Union continued to surge, up +27.2% y-o-y in 2020 to 6.0 mln tonnes. The EU is now the top destination for American LPG, accounting for 12.8% of all shipments. Mexico has been a key destination for LPG exports from the US Gulf for many years. Mexico imported 3.8 mln tonnes of LPG from the USA in 2020, which is a decrease of -7.1% yo-y from 2019. An additional 8.4 mln tonnes was shipped to Central and South America, including the Caribbean. These volumes have increased by +8.9% in 2020, and often are carried on smaller sized vessels”, Banchero Costa concluded.
Nikos Roussanoglou, Hellenic Shipping News Worldwide