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LPG Forecast 2020

FGE's comprehensive assessment of the global LPG market.

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FGE’s annual LPG Forecast is a comprehensive assessment of the global LPG market, divided into two main geographical areas, East and West of Suez. In this forecast, FGE examines the industry dynamics on a country and regional level, and then derives an assessment of the trade balances—where propane and butane is moving and why, feeding into this forecast of prices and margins.

2019 has been a whirlwind of sanctions, crude cuts, drone attacks and trade dispute, affecting the international LPG market. At present, the impacts of most of these factors are still being felt:

  • Declining Middle Eastern LPG exports due to crude cuts and sanctions, and the subsequent growth of West-East arbitrage flows.
  • Shuffling of the LPG trade flows due to the ongoing US-China trade dispute.


OPEC+ Crude Production Cuts

A similar situation of low to no spot availability is expected in 2020.  Saudi Aramco has reported LPG term exports for 2020 at 8.4-8.5 mmt.  Whether there will be any spot cargoes remains the question.  OPEC+ has agreed to deepen production cuts by another 500 kb/d, amounting to 1.7 mmb/d.  The cuts will last through 1Q 2020, and it is unclear if it will be extended after end-March 2020. 

LPG-Forecast -Fig -1

Outlook For 2020

We will likely see another wave of US export expansions in 2020; Mariner East (ME) 2 Actual pipeline is scheduled for start-up in 2Q after much delay, while ME 2X in-service date has been postponed from end-2019 to mid-2020.  Expansions at Enterprise and Targa terminals are expected to begin towards the end of 2020.

With fewer Middle Eastern exports, we expect CP to be higher than usual (albeit lower than last year). Theoretically, this will strengthen the arb economics from the US. Potentially lower Mont Belvieu prices (caused by inventory overhang towards winter 2020 and strong production growth) should also help arb economics to some extent.  We project US LPG exports to be 47 million tons in 2020.

Asia Pacific remains the global LPG demand driver, with LPG imports into Asia expected to rise from 68 mmt in 2019 to 86 mmt in 2025 and 95 mmt in 2030:

  • Populous regions of South and Southeast Asia will continue to see growth in LPG’s usage as cooking fuel.
  • China’s growing steam crackers and propane dehydrogenation plants (PDH) will increase the country’s LPG demand.

LPG-Forecast -Fig -3


VLGC Shipping Rates and Orderbooks

We expect the shipping market to remain relatively strong in 2020, with rates to remain in the mid- to high-$50/ton levels, well above the often-regarded breakeven levels of $30-40/ton.  With IMO 2020 in force since January 1, vessels will now and then be scheduled for retrofitting activities, and shipowners will be taking shipping capacity off the waters.  As such, we believe that the shipping market is very much in balance now.  

LPG-Forecast -Fig -2


This year, we have expanded the LPG Forecast 2020 with two new sections: LPG petrochemicals and Pressurized LPG to delve deeper into the analysis of the LPG markets.  The Report Scope on the next page provides further elaboration on what are being covered in the respective sections.  


  • Two hard copies of the report
  • One PDF soft copy of the LPG Forecast Update (available at the middle of every year)
  • Weekly LPG Confidential Report
  • Associated Excel data file
  • One PDF soft copy of the report
  • Associated Excel data file
  • A presentation of FGE's latest analysis on the global LPG market
  • 15 hours of consultation with FGE's LPG team available per year for telephone discussions, fax and email inquiries

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