LPG market in the 1st half of 2023.

In the first half of 2023, global LPG consumption in Poland fell by 2.3% year-on-year to 1192,000 tons. This was primarily the result of a mild winter and lower demand for heat, as well as conscious efforts to reduce energy consumption. During the same period, imports rose by nearly 9%, with the surplus going to exports.

LPG exports doubled, from 167 thousand to 324 thousand tons in the first six months; this is already 21% of the Polish market. 61% of this volume (nearly 200 thousand tons) goes to Ukraine, which in 2022 became the largest buyer of re-exported LPG.

It is worth noting that easy-to-transport LPG, supplied to Ukraine primarily from the Polish direction, plays a fundamental role in Ukraine's current energy mix. According to the Ukrainian LPG Association, currently the largest consumers of LPG in Ukraine are private consumers in cities and the armed forces. Compared to 2021, Ukraine's imports of LPG in cylinders in 2022 increased 6-fold, as LPG has become a key energy carrier for heating and cooking.

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The supply structure of the Polish market has not changed significantly: production amounted to 228,000 tons, covering 15% of demand, with imports accounting for the remainder. Russia remained the largest supplier, with its share in the import structure rising slightly from 48.7% to 50.1%. The continued strength of Russian supplies is due to three elements: logistics connections and availability of terminals on the eastern border, a competitive price (in 2023 on average 1/6 lower than from alternative directions) and the dominant role of autogas in the Polish LPG market, which means stable demand for the Russian blend.

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The share of supplies from Sweden fell in 2023 compared to the same period last year from 31% to 22%, while the role of other suppliers - in particular NIderland (4.6%), the UK (4.6%) and Kazakhstan (4.5%) - is consistently strengthening. Sweden's share in supplying the Polish market reached historic highs first in May and then in November 2022, when it approached 100,000 tons.

While LPG supplies from Russia showed a declining trend in the first half of 2022, they rose again from autumn to the end of the heating season, recording a peak in March 2023, when nearly 140,000 tons of raw material were imported to Poland. A significant part of the raw material from Russia was re-exported by Poland to Ukraine. The second half of the year will verify the effectiveness of President Zelensky's May decree banning the import of hydrocarbons to Ukraine from the territory of the Russian Federation.

In H1 2023, deliveries by rail traditionally dominated. 53.2% of LPG entered Poland by rail versus 34.6% by sea and 8.6% by road. These proportions were unchanged from the previous year.