Provisional numbers for December 2017 put the India’s LPG imports to be around 2.4 million tonnes, which is marginally higher than the 2.3 million tonnes imported by China in the same month, marking the first time that India’s monthly imports were higher than China’s, according to Drewry.
In spite of this, India’s total LPG imports in 2017 were substantially lower than China’s, with 13.1 million tonnes to 19.7 million tonnes respectively.
“A key factor here is that China has a consumption base which is almost double that of India. Chinese LPG consumption is currently running at an annual level of 44 million tonnes compared with 23 million tonnes for India. As LPG demand in both the countries is set to continue growing, we do not see the import gap narrowing soon,” Drewry noted.
China is a far more important player in shipping market, with its LPG import sources diversified. Through 2017, China imported 66% of its total LPG import requirement from the Middle East and 18% from the US. By contrast, India receives almost 99% of its LPG imports from the Middle East, a short-haul destination that does not create a lot of tonne-mile demand.
According to Drewry, the Middle East is the preferred source for Indian LPG buyers because:
- The short voyage distance keeps transportation costs down and
- Indian buyers prefer a higher proportion of butane, whereas the majority of LPG production in the US is propane.
“…Despite the bullish noises coming from the Indian LPG market, China will remain the most influential country in both LPG commodity and shipping market, at least in the medium term,” Drewry concluded.
