Supply Chain Research

Propane and butane heaters have been experiencing heightened demand, as Axios reports that 50% of full service restaurants are looking to extend outdoor dining seasons. With the ongoing pandemic creating continued demand for outdoor, socially distant dining, restaurants have started to stock up on machinery to keep their guests comfortable outside through the winter.

Panjiva data on imports of patio heaters show that imports are highly cyclical, focused on the autumn months, and have already seen a 24.5% third quarter year over year increase in volume. Propane and butane equipment – which powers most outdoor heaters – has also seen an uptick. While not as cyclical as heaters – propane is also used in summer grilling – equipment for storing, managing, and using those fuels increased by 19.3% year over year in the same time period. 

Chart compares U.S. seaborne imports of patio heaters and propane equipment on a monthly and three month average basis.   Source: Panjiva

The largest beneficiary of this boom in demand has been China, whose imports to the U.S. of those two categories combined increased by 32.0% year over year in the third quarter. That’s come despite the application of list 4A, section 301 tariffs applied to gas bottles and list 3 tariffs being applied to heaters. That also surpassed an increase of 12.9% year over year from Asian countries excluding China. Other country’s U.S. imports of those products fell 29.3% year over year, including USMCA and European countries.

While 63.6% of Panjiva company data in the last twelve months to Sep 30 is associated with logistics firms, two importers may not be in a good position to capitalize on the heater trend.

One, AZ Patio Heaters, saw associated imports to the U.S. fall by 5.8% year over year in the third quarter. Costco, a warehouse club that saw success in the early stages of the pandemic –  as discussed in Panjiva research of June 3 – saw associated imports of heaters fall by 9.6% year over year in the same period, possibly to avoid overstocking risk.

Both firms sourced largely from China, with 98.7% of associated AZ imports and 88.7% of Costco’s imports coming from China in the twelve months to Sep 30.

Chart segments change in U.S. seaborne imports of patio heaters and propane equipment by origin.   Source: Panjiva