H1 2025 China LPG Market Review
China’s LPG prices registered a downward trend in H1 2025, mainly influenced by the decline in the international crude oil prices and supply-demand mismatch. Although the Sino-U.S. reciprocal tariff in April and the international crude oil price surge in June gave support to civil-use gas and C4R2 prices, the overall LPG prices went down in H1 2025. In H2 2025, it is estimated that China’s LPG prices may increase at first and then move downward. The overall civil-use gas and C4R2 demand may recover from Q3 to early Q4, lifting LPG prices. Considering the supply-demand imbalance and declines in the international crude oil prices, it is predicted that China’s LPG prices may move sideways in Q4 2025.
China’s LPG market underperformed in H1 2025, influenced by changes in the international market and China’s domestic supply and demand fundamentals.
According to SCI’s data, China’s civil-use gas and C4R2 prices averaged RMB 4,833/mt and RMB 4,947/mt in H1 2025, down 1.71% and 6.02% YOY respectively.
In terms of the civil-use gas prices, China’s civil-use gas market saw brief price spikes driven by surging international crude oil prices, concerns for supply from independent refineries and pre-Lunar New Year replenishment. With bullish impacts of the international crude oil market weakening, the overall procurement was mediocre, so China’s civil-use gas prices went down. From February to March, both CP and the international crude oil market underperformed, giving thin support to China’s civil-use gas market. Meanwhile, the end demand was sluggish, and refineries took overhauls in succession. Most market participants adopted wait-and-see attitudes to the market. Accordingly, China’s civil-use gas prices were relatively stable. In early April, the reciprocal tariff resulted in concerns for import supply, and some market participants intended to purchase resources from the Middle East, notably lifting the LPG import costs. Therefore, China’s civil-use gas prices surged and reached the annual highest level. Given the sluggish demand, declines in the international crude oil prices and unit restarts, China’s civil-use gas kept dipping for about two months. In the second half of June 2025, the international crude oil prices rose dramatically with the geopolitical risks, lifting the international LPG and China’s civil-use gas prices.
As for the C4R2 market, market participants adopted bullish attitudes to the oil product market due to the crude oil supply at independent refineries in Shandong, so China’s C4R2 prices saw notable increments. However, the actual demand was lower than expected, so China’s C4R2 prices dropped rapidly. In February 2025, some refineries in Shandong were shut down for maintenance, weighing down C4R2 supply. Given the tight supply, China’s C4R2 prices went up. However, prices of oil-blending feedstock underperformed, weighing on the improvement in C4R2 prices. Accordingly, China’s C4R2 prices trended flat. From March to May 2025, the demand for alkylate weakened, and operating rates of downstream industries went down, weighing on the procurement enthusiasm. Therefore, China’s C4R2 prices moved downward and were lower than civil-use gas prices. In June 2025, the international crude oil prices kept rising, notably supporting the oil product market. Accordingly, China’s C4R2 prices rose dramatically. However, with impacts of geopolitical situation weakening, China’s C4R2 prices dropped at the end of June 2025.
LPG price drivers: international crude oil and LPG prices and changes in supply and demand fundamentals
The international crude oil prices rose to high levels and then went down in Q1 2025. Entering Q2 2025, the international crude oil prices saw notable ups and downs in the wake of reciprocal tariff and severer geopolitical situation.
The propane and butane CP went down in Q1 2025, due to the loose supply and demand fundamentals. Entering Q2, influenced by the tariff policy and geopolitical risks, the propane and butane CP further declined. However, China’s LPG import costs remained firm, as traders intended to purchase resources from the Middle East.
China’s LPG supply was relatively ample, and the demand was lower than expected. Moreover, the international LPG prices were relatively high, as China imposed 10% tariffs on the U.S.-origin LPG resources, and prices of resources from the Middle East also went up. However, China’s civil-use gas demand was tepid, and there were more butane resources. Besides, the demand from the oil product market also underperformed, and China’s propylene prices kept dipping. Accordingly, China’s LPG market experienced severe supply-demand imbalance.
China’s LPG inventory dropped and then went up, mainly influenced by changes in import volume. China’s PDH capacity further expanded in 2025, but the international LPG prices were relatively high. Moreover, importers showed limited interest in purchasing resources at first due to the bearish expectation. Accordingly, the overall import enthusiasm was normal, and the overall LPG inventory declined notably. However, China’s LPG import volume rose dramatically in April and May due to the Sino-U.S. tariff. Although the LPG production at some state-owned refineries went down due to the unit maintenance, the overall LPG inventory increased, intensifying the supply-demand imbalance.
Entering H2 2025, it is predicted that China’s LPG prices may increase at first and then decline, influenced by China’s domestic supply and demand fundamentals, changes in international crude oil and LPG prices.
Supply-demand expectation: The increment in LPG supply may be higher than that in LPG demand.
Supply: The unit maintenance may reduce in H2 2025, and overhauled units may be restarted slowly. Moreover, some newly added capacity may be put into use, and the demand from the chemical sector may grow rapidly. Accordingly, China’s LPG output may increase gradually. In terms of the LPG import, given the uncertainties in geopolitical risks and Sino-U.S. negotiations, China’s LPG import volume in H2 2025 may see limited increments from H1 2025.
Demand: With the market gradually entering peak season, it is predicted that the demand for civil-use gas may improve somewhat in H2 2025, but the overall civil-use gas demand may weaken in 2025. Moreover, the newly added capacity in H2 2025 may be limited. For example, only one or two PDH units may be put into use in H2 2025, curbed by the unit profit and increments in import costs. Besides, influenced by the feedstock transformation and relatively high LPG prices, it is predicted that the demand for LPG from the chemical sector may see minor improvements in H2 2024.
Crude oil: It is estimated that the international crude oil prices may rise at first and then go down in H2 2025.
H2 2025 international crude prices are projected to rise initially before declining. Key market drivers include tariff risks, macro rate cuts, OPEC production policy and actual demand in peak season. Under a baseline scenario of U.S. economic soft landing and OPEC-led supply surplus, with controllable financial and geopolitical risks, it is predicted that the international crude oil prices may follow an up-down trajectory. Q3 may see recovery supported by seasonal demand, while Q4 faces heightened inventory buildup pressure, maintaining a persistent downward trend.
LPG price forecast: China’s LPG prices may rise at first and then go down.
Overall, China’s LPG prices may rebound at the end of Q2 or early Q3 2025. Influenced by the supply and demand fundamentals, China’s LPG prices may go down in Q4 2025. In H2 2025, China’s civil-use gas and C4R2 prices may average RMB 4,773/mt and RMB 4,901/mt respectively. Therein, the highest civil-use gas price may be RMB 4,910/mt in October, and the lowest level may be RMB 4,600/mt in July. Besides, the highest C4R2 price may be RMB 5,000/mt in September, and the lowest price may be RMB 4,780/mt in December.
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