Thread Content
Recently, market analysts have predicted that the supply of liquefied petroleum gas (LPG) in the United States and the Middle East is set to increase by 2026; coupled with weak demand from downstream petrochemical industries, this will put pressure on LPG prices. According to Platts, a division of S&P Global Energy, the average CIF Northeast Asia price for propane in Asia in 2025 was 547.92 dollars per ton, a significant drop from 628.23 dollars per ton in 2024. Edgar Ng, Deputy Director for Natural Gas Liquids (NGLs) at S&P Global Commodity Insights’ CERA, said on December 11, 2025: “The current LPG market is entirely dominated by buyers, and the supply and demand balance in the market is expected to be more balanced in 2026 compared to 2025.” ”He also warned, “If supply and demand can grow in step as expected, the market will naturally improve.” However, if demand in Asia collapses—such as when the arbitrage opportunity disappears, trade barriers rise, and the petrochemical industry fails to recover—buyers may refuse to take delivery of goods or cancel export orders, leaving the LPG market trend full of uncertainties. Theoretically, weak demand will drive down prices. ” On the supply side, increases in supply from both Saudi Arabia and the United States have intensified pressure on the LPG market, especially in Asia. Asian LPG traders, purchasers, and analysts say that the new supply to the LPG market in 2026 will come primarily from the commissioning of the Jafra gas field in Saudi Arabia, as well as from the expansion of LPG export facilities in the United States. With the commissioning of the Jafra field, Saudi Arabia’s largest unconventional associated gas field, LPG supply is expected to increase by 2026. The Saudi Ministry of Finance also issued a statement on December 2, 2025, stating that Saudi Arabia’s natural gas production capacity would increase by 7% in 2026. An LPG trader based in Singapore said, “It is not yet clear when and in what quantities LPG from the Middle East will be shipped, but it is likely that the new supply to the LPG market in the second half of 2026 will come mainly from Enterprise Products Partners in the United States.” It is expected that propane spot prices will decline next year, with the drop being more significant in the second half of the year. ” At the end of November 2025, Enterprise Products Partners announced that the 550-mile long Bayou Natural Gas Condensate Pipeline, with a daily processing capacity of 600,000 barrels, had been put into operation. This pipeline transports natural gas condensate from the Midland Basin and Delaware Basin to the Bellevue facility in Texas for processing and fractionation. The company also disclosed that it plans to put a natural gas processing plant into operation in the first half of 2026, as well as complete the construction of Phase 2 of the Natchez River terminal; another natural gas processing plant will be added in the fourth quarter of the same year, and the expansion of the LPG export facilities at the Enterprise oil and gas terminal will be completed by the end of the year. Regarding downstream demand, market participants believe that Asian propane dehydrogenation (PDH) plants have a limited impact on boosting LPG demand, which will thus suppress LPG demand. An Asian buyer and a Singaporean LPG trader said that although new PDH units built in 2026 will help support demand for propane, expectations regarding their impact on the market have diminished as the scale of new PDH capacity added is smaller than in previous years. Edgar Wong said, “We expect the global petrochemical market to struggle to see a significant recovery in 2026, and it will remain in a sluggish state overall.” Especially against the backdrop of ongoing release of new production capacity and a slow pace of demand recovery, market pressure will further intensify. Given our pessimistic outlook on crude oil prices, the prices of various oil-related products are expected to fall, although some of these products may receive support that helps to mitigate the extent of those declines. ” LPG industry insiders and analysts also point out that factors such as geopolitical tensions, weather changes, and fluctuations in shipping rates will also have an impact on Asia’s LPG market in 2026. A trader based in Singapore mentioned that with few long-term contract orders, trading in the spot market is likely to become more active, and prices may fluctuate rapidly in response to changes in supply and demand. However, another analyst based in Singapore is cautious about the pessimistic views in the market. He pointed out that suppliers might choose to stockpile LPG as a raw material for production, which could tighten the supply of spot market LPG to some extent.