Recovery in China’s LPG imports: Can the rebound fuel robust growth in 2H25?

Summary

China’s LPG market swung from a sharp decline in June to a tentative recovery in July and August after a temporary easing of US–China tariffs and stronger feedstock demand from PDH plants. The April tariff tensions hit imports hard — US LPG share plunged from about 59% in February to 12% in June — but a 90-day tariff pause and a second extension helped spur cautious buying of US cargoes again.

Price dynamics and rising global supply, led by US exports and higher Middle East output, pushed landed Asian prices lower and encouraged fixing activity despite elevated spot freight on long-haul routes. Yet the rebound faces obstacles: weak petchem margins, shifting feedstock economics (steam crackers favouring naphtha), seasonal falls in MTBE/butane demand, and geopolitical/tariff uncertainty. Drewry expects China’s LPG import growth to stagnate around 2% in 2025, with VLGC market volatility persisting as structural oversupply and modest demand growth weigh on long-term earnings.

Key Points

April US–China tariff escalation caused a collapse in China’s US-origin LPG imports; US share fell to c.12% in June from c.59% in February 2025.
A 90-day tariff pause (and a second extension) encouraged a cautious return to US LPG, supporting a partial import recovery in July–August.
Robust PDH plant demand and increased global supply (US exports, Middle East output) helped lower landed prices and stimulate fixing activity.
Downside risks remain: weak PDH margins, seasonal MTBE/butane demand drops, steam crackers switching to naphtha, and geopolitical/tariff volatility (including reliance on Iranian LPG).
Shipping impact: route realignments and vessel repositioning pushed VLGC spot rates higher intermittently, but fleet oversupply and slow demand growth threaten long-term earnings.

Context and relevance

This piece is important for shipowners, traders and petrochemical operators tracking short-term freight dynamics and feedstock flows. China is the world’s biggest LPG destination and its buying patterns directly influence tonne-mile demand and VLGC earnings. The article links trade-policy moves, petchem margins and seasonal demand to shipping market outcomes — helpful context for commercial planning, chartering strategy and risk assessment.

Why should I read this?

Short version: if you follow VLGC rates, trade flows or China’s petchem demand, this explains why freight spiked, where cargoes actually moved and why the rebound might not stick. We’ve sifted the tariff drama, PDH drivers and shipping angles so you don’t have to — quick, practical read.

Author’s take

Punchy and to the point: the rebound is real but fragile. Tactical upside for owners exists while trade realignments persist, yet the bigger picture — oversupplied fleet and soft demand growth — keeps a lid on durable rate recovery. If you’re exposed to LPG markets, treat recent gains as opportunities, not a new base case.