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.