LPG Industry Chaos Highlights The Mode Of Innovation Can Have Room For Development

- Nov 14, 2017-

LPG (liquefied petroleum gas) in our country has a large user base, occupying 20% of the city gas consumption, and the upward trend will continue.


In recent years, the output of crude oil has increased year by year. As a downstream product of crude oil, the output of LPG has also been on the rise. With the popularization of liquefied petroleum gas usage in our country, every year a large number of LPG needs to be imported.

According to the statistics of the "China LPG Industry Report" of the Industry Research Institute of Prospecting Industry, China imported 1.4 million tons of liquefied petroleum gas in August this year, up 23% over the same period of last year.

However, due to the low barriers to entry of the LPG industry, the entire LPG market has become a stumbling block to the development of the industry.

Throughout the entire LPG industry, as LPG is only a derivative of the petroleum refining process, most companies focus on oil as a profit. The recent oil prices continued to decline, all kinds of oil terminal products are also priceless city, LPG is all the way down from the price of 8,000 yuan per ton to 4,000 yuan. Moreover, the petroleum processing enterprises are mostly concentrated in the northern region. This region already had the phenomenon of overcapacity. The low oil price hikes also aggravated the financial pressure on such enterprises. Some LNG companies even went bankrupt, so the reshuffle of the industry is a foregone conclusion.

In the LPG market-oriented segment, LPG can be operated only by paying agency fees upwards, resulting in a large number of operators. Currently there are about 15,000 in the country are operating the LPG business, the entire industry is very fragmented, difficult to control, in a limited market space, smart operators led to each other's adverse competition. And because most of the operators are very small in scale, their business conditions are extremely non-standard, leading to LPG safety accidents all over the country and affecting the promotion of LPG in the market.

There is no doubt that for the healthy development of the LPG industry, the chaos in the industry must be eradicated and the market concentration will certainly increase. Therefore, the brand and scale will be the future development direction of the LPG industry. Relevant enterprises need to seize market opportunities and boldly reform their own problems. While merging small-scale enterprises, they may also choose to conduct joint ventures with similar-sized enterprises, Work together to improve the service level and grade of LPG industry.

In order to promote the progress of the LPG industry and raise the industry threshold, it is imperative to rectify the existing LPG market.

At this stage, oil prices down, the United States in shale gas exploitation will eventually lead to major reshuffle in the LPG industry, the price has become a foregone conclusion. Therefore, for the domestic LPG industry, it is necessary to firmly grasp the market dynamics, while fully taping the market demand, we must also speed up the innovation and application of industrial technologies. At present, only in the business model for a breakthrough, it is possible to occupy the commanding height of the development of the industry in the future.

Hubei Daly LPG Cylinder Manufacturer Co., Ltd
Add:1# Yanglinwei Town, Xiantao City, Hubei Province, China