China Propane Prices May Rebound

China’s propane prices kept dipping from October to November. In H2 November, China’s propane prices slightly increased, as most downstream users replenished stocks at low prices.

Recently, China’s propane prices inched up. Therein, the propane prices in northern China increased at first and then trended flat, and that in southern China kept rising. According to SCI’s statistics, the propane prices in southern China increased by RMB 339/mt or 8.07% from December 7 to December 13, greatly lifting China’s propane prices.

On the one hand, the international crude oil prices continued to decline from Q4, 2018, so most market participants adopted cautious attitudes to China’s propane market. In the short term, the bearish impacts on the propane market from the international crude oil will alleviate to some extent, as it is predicted that the international crude oil prices may be relatively stable. On the other hand, the costs of imported propane remained low, weighing on the domestic propane market. But the import volume of propane was relatively low, thus the propane supply went down. However, the downstream demand for propane was relatively strong in winter. Therefore, China’s propane prices started to go up.

On the whole, the bearish impacts on China’s propane market are limited, and the sales pressure on sellers obviously alleviates. Meanwhile, the short supply will continue to give support to the propane prices, so SCI reckons that China’s propane prices will continue to increase in the short term. In the long run, with the propane supply rising, SCI estimates that China’s propane prices will fluctuate within a narrow range.