Demand in Asia Contributes to More U.S. Propane Exports

United States exports of propane have been increasing in recent months, primarily to countries in East Asia, as a result of cold weather and robust petrochemical feedstock consumption that drive demand in that region, the Energy Information Administration (EIA) reported Feb. 9. Between April 2020 and November 2020 (the most recent monthly data in EIA’s Petroleum Supply Monthly), approximately 58% of all U.S. propane exports went to markets in Asia. Nearly half of all U.S. propane exports in those months were shipped to three countries: Japan, China, and South Korea.

Consumption of propane as petrochemical feedstock in East Asia has been supported by demand for propylene, a base chemical used to manufacture polypropylene, a polymer used to produce car interiors, packaging, and personal protective equipment. According to China’s customs data, in 2020, Chinese exports of plastics and resins rose 15% in 2020, and the year-over-year increase reached an annual peak of 41% in November. In 2020, China’s exports of pharmaceutical preparations and supplies increased 44%.

Other factors have also contributed to the growth in U.S. propane exports to East Asia. Weather-driven demand for propane as a heating fuel increased when the La Niña weather phenomenon resulted in colder winter weather in the region. The United States has also accounted for a greater share of propane imports to Asian countries because voluntary reductions in crude oil production in Saudi Arabia have led to fewer exports out of the Middle East, which has traditionally been a major supplier for markets in Asia.