US exports of ethane and LPG hitting all-time highs

US exports of ethane and LPG are hitting all-time records with Chinese demand showing no sign of slowing according to a new report from Evercore ISI.

Energy Transfer’s joint venture ethane terminal in Nederland, Texas came online in January this year, the third American ethane export terminal in operation alongside Navigator’s Morgan’s Point export terminal in Texas and a facility located in Marcus Hook in Pennsylvania.

Two very large ethane carriers (VLECs) loaded at Nederland last week and are now bound for a Satellite Petrochemical ethane cracker in China. The twin calls pushed weekly exports from America to new highs of nearly 500,000 barrels per day, up from previous weekly peaks of slightly over 300,000 barrels per day.

“The ethane arb between the US and China remains healthy, as Chinese demand continues to grow. Though not to be outdone, the frothy ethane market has been mirrored by Chinese import demand for LPG,” Evercore noted in new research issued yesterday.

In April, Chinese LPG imports reached 61,000 barrels per day, as US LPG prices fell on lower domestic heating demand, allowing the April LPG arbitrage to widen and pull more LPG exports onto the water bound for primarily East Asia.

“If Asian demand continues to push to new levels it may prompt higher charter rates for our LPG maritime coverage,” Evercore stated.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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