Aug CP Sees Declines
The August propane CP was $520/mt, down $55/mt MOM. At the same time, the August butane CP was $490/mt, down $55/mt MOM.
The international crude oil prices fluctuated downward, weighing on the international LPG market and exerting bearish impacts on market sentiment. The port in the U.S. may be put into use in Q3 2025. Moreover, some PDH units and crackers in the Middle East took overhauls, so the overall LPG supply was ample. China’s civil-use gas resources were sufficient, but the demand for civil-use gas was sluggish, hindering downstream procurement. Besides, market participants adopted wait-and-see attitudes to the market, so the overall market trading was scarce.
Orders in July performed well, and the low July CP gave support to the LPG market. Accordingly, the August CP expectation was $560/mt for propane and $530/mt for butane as of mid-July. Entering the second half of July, the premiums kept dipping in the wake of Sino-U.S. trade friction and tepid demand. As of the end of July, the expectation for propane and butane CP reached $520/mt and $500/mt respectively.
The price spread between propane CP and butane CP remained high. The resources from the Middle East were relatively sufficient. Middle Eastern cargoes contained higher butane content versus the U.S. supplies, so the elevated butane supply hindered prices. Moreover, the overall demand for butane was lower than that for propane, as the operating rate of the PDH industry remained high.
Forecast: It is estimated that the September CP may see minor fluctuations. Although the demand for civil-use gas may recover in September, the overall supply and demand fundamentals may underperform, giving thin support to the LPG market. Moreover, there are still 10% extra tariffs on U.S-origin resources, influencing China’s LPG import structure. In general, August CP notches an annual low, so it is predicted that the September may rebound. However, the overall price fluctuation may be limited with loose supply and demand fundamentals.
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