Aug CP Sees Increments
The August propane CP was $590/mt, up $10/mt M-O-M. At the same time, the August butane CP was $570/mt, up $5/mt M-O-M. The international LPG supply and demand fundamentals were key drivers influencing international LPG prices.
The August propane and butane CP saw slightly increments. First, it was expected that the LPG supply from the Middle East would shrink. Influenced by the windstorm and the sinking of boat in the U.S., the overall loading was delayed. Accordingly, the international LPG supply was tight, notably supporting the international LPG market. Second, India has launched a tender for 3,000kt of CP cargos in 2025, and China’s PDH unit operating rates were relatively high, slightly lifting CP.
As of July 29, 2024, selling prices of imported LPG in China averaged RMB 5,071/mt, up RMB 9/mt or 0.18% M-O-M. China’s LPG import arbitrage underperformed, and the monthly average import arbitrage was RMB 10/mt. China’s LPG import costs remained high. Meanwhile, China’s LPG import arrivals may notch an annual high. Sales of civil-use gas at state-owned refineries were relatively low, and the international LPG prices remained firm. Accordingly, importers were reluctant to sell goods at low prices. Overall, China’s LPG import arbitrage was limited in July 2024.
Forecast: It is estimated that the September CP may saw slight fluctuations. The international crude oil prices may fluctuate upward, but the overall price increment may be limited. Moreover, the international LPG supply may go up, as the Panama Canal runs smoothly, and the LPG supply from the U.S. and the Middle East may recover to the normal level. In terms of the demand for LPG, it is estimated that the overall LPG demand may be relatively strong, as the overall procurement enthusiasm in China may perform well. Overall, it is predicted that the September CP may inch down, and China’s LPG import costs may remain over RMB 5,000/mt, supporting China’s domestic LPG market.
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