China Propane Prices to Further Decline

In H1, 2019, China’s propane prices slightly dropped, as the international crude oil prices kept dipping. According to SCI’s statistics, China’s propane prices averaged RMB 4,239/mt in H1, 2019, down RMB 84/mt or 1.94% Y-O-Y.

From May to June 2019, China’s propane prices kept dipping amid bearish atmosphere. In mid-June, the propane market resumed somewhat, as downstream users needed to replenish stocks and the production and sales at sellers were relatively balanced.

Entering summer, China’s propane demand dramatically weakened, and the market trading atmosphere underperformed. On the one hand, the international crude oil prices exerted great impacts on the propane market. In June, the international crude oil prices fluctuated within a narrow range, so China’s propane market reversed its losing streak. Accordingly, most market participants intended to stock up. However, there were many uncertainties in the international crude oil market.

On the other hand, the supply-demand fundamentals in the slack season also influence the propane market. Up to late June, China’s daily average propane supply volume was 5,270mt. Although some units were shut down in summer, the commercial propane volume remained largely stable, as the propane capacity was

As for the propane demand, it kept weakening. Moreover, more and more downstream users intended to purchase civil-use gas, as it was more difficult to transport and store propane. Accordingly, the sales of propane became tepid.

On the whole, SCI reckons that China’s propane market may improve somewhat, if the international crude oil prices keep rising. If not, the propane sales will become tepid after the replenishment. All in all, SCI estimates that China’s propane prices will further decline from June to July.

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