Overview

FGE’s annual LPG Forecast provides a comprehensive summary and assessment of the global LPG market, divided into two main geographical areas: East and West of Suez. In this year’s report, FGE examines the industry dynamics on a country, regional and global level and then derives an assessment of LPG trade and shipping balances, as well as an outlook on prices, margins and shipping rates.

For LPG market players who have net length from the US and were balanced or short in shipping, 2024 has likely been a stellar year. The very wide EW spreads, mirroring those seen in 2023 but this time coupled with sky-high spot terminal fees and lacklustre freight rates, were the main highlights.

Aside from the US, the OPEC+ battle against declining oil prices was also another key talking point of 2024. Restricted growth in associated gas production meant that Middle East LPG exports were largely constrained. Nonetheless, the market still saw some growth, largely driven by small, non-associated gas projects.

What will 2025 have in store?

The length in product markets will gradually decrease as slowing supply growth expectations could provide upside support to prices in 2025. Much will hinge on OPEC+ policies too, and whether the group will be able to raise crude output and consequentially LPG production.

In Asia, we continue to see a wall of new capacity growth across both PDH and steam crackers that will continue to put pressure on the olefin complex. This is not exactly good news for players operating in this space. Unfortunately for many, the outlook is unlikely to improve anytime soon!

The upcycle in US shale continues – albeit at a slower rate compared to 2023 and 2024 – with tight oil growth driving most of the incremental growth in US C3+ production. We expect to see continued North American NGLs growth throughout this decade, though growth should moderate in the late 2020s.

While 2024 has not been stellar for shipping (especially compared to 2023), it could be argued that it was still a decent year for the industry, with shipping rates broadly higher than the 2018-2022 average. The freight market continues to remain sufficiently tight in 2025, with minimal tonnage growth helping to keep rates up.

However, the longer-term question is whether a downcycle might be on the horizon, given the massive VLGCs/VLACs orders currently in the orderbook.

Outlook For 2025

• An in-depth look at the potential for US upstream NGL supplies in 2025, mapped from gas plant to terminal.
• An in-depth look at Asia’s demand growth in 2025, analysing how the rescom and petrochemical sector will evolve. Could petrochemical margins improve or is the industry still trapped in an olefins downcycle?
• The EU ban on Russia LPG will shift Eastern European LPG dynamics from 2025. How might the market evolve into the future?
• With the return of President Trump from January 2025, what is the impact on oil and LPG markets? Could we see a repeat of 2018-2019, where the US-China trade spat upended the LPG market?

Beyond 2025

• What will slowing US export growth and the rise of Middle Eastern supply in the mid-2020s mean for the future structure of global LPG markets?
• A long-term look at feedstock demand in Asia, the US and Europe over the next 20 years.
• What is the realistic potential of BioLPG as a fuel source over the next 20 years?
• With many new VLGC orders placed in 2023 and 2024, will there be another market downcycle in the latter half of the 2020s?