China LPG Prices Rise Moderately with Crude Oil Price Surge
Recently, the international crude oil prices saw notable increments, but China’s LPG prices just rose moderately, as the supply and demand fundamentals were key factors influencing the market.
As for the civil-use gas market, the international LPG prices went up, so importers intended to raise selling prices. However, state-owned refineries showed low interest in adjusting prices, and the end consumption was relatively slow in summer. Accordingly, sellers gave priority to selling goods, and the overall civil-use gas prices saw increments of RMB 0-50/mt. In terms of the C4R2 market, China’s gasoline prices went up with the international crude oil price surge, both gasoline and alkylate prices went up, supporting the oil product market. Therefore, C4R2 prices in northern China increased by RMB 150-200/mt, and those in southern China saw increments of RMB 50-80/mt.
Entering June, China’s LPG commercial volume went up, as China’s state-owned refineries were restarted in succession. Therein, the commercial volume of civil-use gas increased dramatically. Influenced by the consumption slack season, the overall downstream procurement enthusiasm underperformed. Therefore, China’s civil-use gas prices moved downward. Backed by the notable increments in the international crude oil prices, sellers slightly raised prices. As for the C4R2 market, China’s C4R2 supply was relatively low. With C4R2 prices declining to low levels, more downstream users replenished stocks, alleviating the inventory pressure. The demand for gasoline improved somewhat in summer, and the international crude oil prices fluctuated upward, lifting China’s C4R2 prices.
It is estimated that the international crude oil prices may remain high in the short term, but it may not last long. China’s LPG commercial volume is likely to further increase. Given the supply-demand imbalance, it is predicted that China’s civil-use gas prices may rebound and then hover at lows. Meanwhile, the demand for oil products may perform well in summer, so the demand for feedstock gas may be relatively strong, supporting C4R2 prices.
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