Propane Market - Growth, Trends, and Forecast (2020 - 2025)

The market for propane is expected to grow at a CAGR of around 5% during the forecast period. Major factors driving the market are the increasing demand from various end-user industries, such as industrial, construction, and petrochemical.

New York, April 09, 2020 (GLOBE NEWSWIRE) -- announces the release of the report "Propane Market - Growth, Trends, and Forecast (2020 - 2025)" -

- The harmful effects of propane at higher concentrations is expected to inhibit the growth of the market studied.
- Asia-Pacific dominated the global market. The largest consumption was witnessed in the China and India.

Key Market Trends
Residential Segment to Dominate the market

- In the residential sector, propane is used for air conditioning, heating water, cooking and refrigerating foods, drying clothes, lighting, and fuelling fireplaces.
- Propane is used mostly in homes in rural areas that do not have natural gas service, as well as in mobile homes. Millions of homes use propane to meet some of their energy requirements. In the United States, about five million households use propane as their main heating source and around one fifth of mobile homes use propane for heating.
- Homes that use propane as a main energy source usually have a large propane tank outside of the house that stores propane under pressure as a liquid. Propane dealers deliver propane to the residences in trucks, filling the tanks several times a year as per the requirement.
- The average residential propane tank holds between 500 and 1,000 gallons of liquid fuel. Millions of backyard cooks use propane-powered gas grills for cooking. Moreover, recreational vehicles usually have propane-fueled appliances, giving them a portable source of energy for cooking, hot water, and refrigeration. People often use propane for outdoor cooking, and because of its portability, it is especially popular with campers and mobile homeowners.
- However, due to improvements in propane usage efficiency, the demand, in terms of volume for propane, may be stagnant in the future.
- The increasing new residential construction, combined with continuing fuel oil conversions, is expected to offset residential space heating losses to electricity and natural gas, which is leading to slow growth in the number of residential space heating customers through 2025.
- The above-mentioned factors are anticipated to drive the demand for propane from residential sector during the forecast period.

China to Dominate the Asia-Pacific Market

- In Asia-Pacific, China is the largest economy, in terms of GDP. In 2019, the country witnessed about 6.1% growth in its GDP, despite having trade disturbance, caused due to its trade war, with the United States.
- China is the worlds largest consumer of propane with an estimated share of about ~20%. To suffice the huge domestic demand, China has imported 14.91 million tons of propane in 2019 representing growth of about 10.8% Y-o-Y over the total imports registered in 2018. The major factor which attributed towards the rise in propane imports in the nation is the increased demand from propane dehydrogenation or PDH plants.
- China represents the second largest autogas market in Asia-Pacific behind Thailand. The autogasmarket in China had developed largely as a result of local programmes to promote alternative fuels to tackle the worsening problem of air pollution in the nation.
- Autogasschemes, which were initially developed in Guangzhou City and Hong Kong, have now been introduced in over 25 other cities. Currently, in Guangzhou, nearly all of the city’s 19,000 taxis and 90% of 8,000 buses had switched to the autogas. Similarly, in Hong Kong, nearly all the taxis operating in city of about 20,000 and 30% of all the public buses run on autogas.
- Currently the Chinese economy has been severely hit with the COVID-19 outbreak. The country was by far the worst affected nation with the virus outbreak beginning in the country itself. All the major manufacturing industries have taken a major hit as the entire nation has gone into self quarantine situation to contain the virus outbreak.
- According to the National Bureau of Statistics of China, in the first two months of 2020, the total industrial output has fallen by about 13.5%. According to the early estimates, the nation’s GDP is expected to grow by about 4% in 2020. However, the industrial output is likely to recover by the end of first half of 2020.
- Overall, the market for propane in China is projected to increase at a rapid rate over the forecast period.

Competitive Landscape
The global propane market is highly fragmented. The major companies include Gazprom, Exxon Mobil Corporation, BP p.l.c., Royal Dutch Shell PLC, and China Petroleum & Chemical Corporation (Sinopec), amongst others.

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