China's LPG Consumption Falls for the First Time in 18 Years

06 Mar 2009 • by Natalie Aster

China's consumption of LPG fell 8.5% in 2008, the first decline since 1990, a Sinopec senior official said Thursday.

The country consumed 21.5 million mt of LPG in 2008, down 2 million mt or 8.5% from 23.5 million mt in 2007, data provided by the official showed.

The fall was the result of the global economic slowdown, the official said on the sidelines of an LPG conference in Haikou, Hainan province in southern China.

"Many factories, especially those that are export-oriented, have been shut or have reduced their consumption of fuels, including LPG, due to the economic slowdown," the official said.

Industrial consumption of LPG fell around 12% or 923,000 mt to 6.5 million mt in 2008, from 7.4 million mt in 2007, data provided by the official showed.

Household consumption of LPG fell 7% or 1 million mt to 15 million mt last year, from 16 million mt, the data showed.

"The data shows that industrial users were more affected by the economic slowdown than household users," the official noted.

Domestic LPG traders at the conference agreed, saying their LPG sales volumes shrank more than 10% in 2008.

China's LPG demand in 2008 was also dampened by the increasing use of alternatives such as LNG, DME, coal and electricity.

China consumed around 78.5 billion cubic meters of LNG in 2008, up 13% from the 69.52 billion cu m in 2007, the fifteenth consecutive annual increase, data from the official showed.

"Chinese demand for natural gas is expected to increase further in the future," he said, adding that consumption for natural gas had recorded double-digit growth each year for the the past six years.

He forecast the country's demand for LPG would hold steady at around 21.8 million mt in 2009.

"The global economy is expected to remain weak in 2009, but the Chinese economy is expected to gradually return to a higher growth rate later this year, which could prevent LPG demand falling further," he said.

Source: Platts