Market analysts recently forecast that liquefied petroleum gas (LPG) supply from the United States and the Middle East is expected to rise in 2026. Combined with weak downstream petrochemical demand, this will exert downward pressure on LPG prices. Data from Platts, a subsidiary of S&P Global Energy, indicates that the average CFR Northeast Asia price for propane in Asia in 2025 is projected to be $547.92 per ton, a significant year-on-year decline from $628.23 per ton in 2024.

Edgar Wong, Deputy Director of Natural Gas Liquids (NGLs) at S&P Global Energy's Cambridge Energy Research Associates (CERA), stated on December 11, 2025: “The LPG market is currently entirely buyer-driven, and the supply-demand balance in 2026 is expected to be more balanced than in 2025.” He cautioned: "If supply and demand grow in tandem as anticipated, the market will naturally improve. However, if Asian demand collapses—for instance, due to closed arbitrage windows, high trade barriers, or sluggish petrochemical recovery—buyers may refuse deliveries or cancel export orders, leaving LPG market trends highly uncertain. Theoretically, weak demand would depress prices."

On the supply side, increased production from Saudi Arabia and the United States has intensified pressure on the LPG market, particularly in Asia. Asian LPG traders, buyers, and analysts indicate that new supply additions in 2026 will primarily stem from the commissioning of Saudi Arabia's Jafurah gas field and capacity expansions at U.S. LPG export terminals. With the launch of Saudi Arabia's largest unconventional non-associated gas field, Jafurah, LPG supply is projected to increase in 2026. Saudi Arabia's Ministry of Finance also announced on December 2, 2025, that the country's natural gas production capacity will increase by 7% in 2026.

A Singapore-based LPG trader stated: "While the exact timing and volume of Middle Eastern LPG shipments remain undetermined, new supply entering the LPG market in the second half of 2026 will most likely be dominated by cargoes from U.S.-based Enterprise Products Partners. Propane spot prices are expected to decline next year, with a more pronounced drop anticipated in the second half."

Enterprise Products Partners announced in late November 2025 the official commissioning of the 550-mile Bahia Gas Condensate Pipeline, featuring a daily processing capacity of 600,000 barrels. This pipeline transports natural gas condensate from the Midland and Delaware basins to the Bellevue plant in Texas for processing and fractionation. The company also disclosed plans to commission a natural gas processing plant in the first half of 2026 and complete Phase II of the Neches River Terminal project. A fourth natural gas processing plant will be added in the fourth quarter of the same year, with the LPG export expansion at the Enterprise Oil & Gas Terminal slated for completion by year-end.

Regarding downstream demand, market participants believe that Asian propane dehydrogenation (PDH) plants will provide limited support for LPG demand, thereby suppressing overall LPG demand. An Asian buyer and a Singapore-based LPG trader both stated that while new PDH plants scheduled for 2026 may offer some support for propane demand, market expectations for their uplift effect have cooled due to the smaller scale of new PDH capacity compared to previous years.

Edgar Ong stated: “We anticipate the global petrochemical market will struggle to achieve significant recovery in 2026, remaining broadly subdued. Market pressures will intensify further amid sustained new capacity additions and sluggish demand recovery. Given our pessimistic outlook for crude oil prices, petroleum-related product prices will generally decline, though certain products may find support to mitigate losses.”

LPG market participants and analysts also pointed out that factors such as geopolitical tensions, weather changes, and fluctuations in freight rates will also impact the Asian LPG market in 2026. A Singapore-based trader mentioned that with few long-term contract orders, spot market trading may become more active, and prices could fluctuate rapidly in response to supply-demand shifts. However, another Singapore-based analyst expressed caution regarding the prevailing pessimism. He noted that suppliers might choose to stockpile LPG as a production feedstock, which could tighten spot market supply to some extent.

As an integrated internet platform providing benchmark prices, on January 12th, the benchmark price of liquefied petroleum gas (LPG) according to SunSirs was 4435.00 RMB/ton, an increase of 1.78% compared to the beginning of the month (4357.50 RMB/ton).

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