Chinese customs data shows imports a year ago were 360,000 tonnes while the highest on record were 1.22 million tonnes in December 2022. Imports of LPG, a mixture of propane and butane, were 3 million tonnes in April, Refinitiv data showed, while Kpler figures showed LPG imports were 2.8 million tonnes. Both figures are records according to their data. China's customs does not give separate LPG import data. Rising LPG and naphtha imports would be a positive sign for China, the world's second-biggest economy and biggest oil importer, as it would point to increasing demand for the petrochemicals that feed the plastics and textiles industries that support its exports. A recovery in some petrochemical demand for clothing was supporting naphtha, said a Singapore-based trader who was not authorised to speak with the media and declined to be named. "Some naphtha went for blending due to (the rise in) domestic demand," a source at a Chinese refinery said, referring to transportation demand during the Labour Day holiday from April 29 to May 3. Naphtha is also used as a blendstock for making finished gasoline. Another Singapore-based trader said imports rose because of rising demand for feedstocks to make olefins. Light olefins, the building blocks for plastics, are obtained through cracking naphtha or LPG. LPG purchases got a boost from firm demand from propane dehydrogenation (PDH) units, analysts said. China is home to the most PDH units in the world. "PDH operation rates continued to recover after slumping to a new low of 54.3% in March. For the week ending April 30, run rate was estimated at 67.2%, up from 64.6% in the prior week," Refinitiv Oil Research said in a May 2 note. The rise in PDH demand points to an increased appetite for propylene, a hydrocarbon used for making polypropylene plastics like water bottles, auto parts and toys.
LPG imports are expected to climb higher in May as demand may rise further. "At least 14 buy tenders were issued by PDH operators for May delivery, totalling more than 500,000 tonnes," Refinitiv Oil Research added. (Reporting by Mohi Narayan; Editing by Christian Schmollinger)
