May China LPG Price to Show an Up-Down Trend
Although the international crude oil prices dropped notably during the May Day holiday, China’s LPG prices went up, as the intensive unit maintenance notably dragged down LPG commercial volume. However, there may be limited rising momentum in China’s LPG prices in the future.
China’s LPG prices declined somewhat before the May Day holiday, as most sellers intended to cut inventory before the holiday. During the holiday, LPG prices in South China inched down, and those in Shandong and East China went up.
The international crude oil prices decreased notably during the holiday, weighing on the market sentiment. Accordingly, LPG prices at some ports in South China edged down. Meanwhile, many refineries took overhauls. Therein, units in Northeast China, Shandong and East China were shut down for maintenance intensively. Therefore, China’s LPG commercial volume declined dramatically. As of April 30, 2024, China’s LPG commercial volume, excluding propane and butane, was 50.8kt, down 2.3kt Y-O-Y. Some refineries in Shandong may take overhauls in H1 May, so it is predicted that China’s LPG commercial volume may further decline.
Influenced by the decline in LPG commercial volume, the inventory at sellers was relatively low. Accordingly, the decline in the international crude oil prices exerted limited impacts on the LPG market. Backed by the demand improvement during and after the May Day holiday, civil-use gas and C4R2 prices in Shandong and East China registered upward trends.
It is estimated that China’s LPG import may remain high in May 2024. The overall import arrivals may be stable in H1 May. Against the backdrop of rising LPG prices at refineries, selling prices of imported LPG will probably inch up. Besides, the international LPG prices may go down with the international crude oil prices declining, exerting bearish impacts on China’s LPG market.
Major factors influencing China’s LPG market are as follows: First, the overall LPG commercial volume may be low at first. With overhauled units being restarted, China’s LPG commercial volume is likely to increase gradually in H2 May. Second, China’s LPG import volume is likely to reach 3,200kt in May, weighing down China’s LPG prices. Third, the demand for civil-use gas will probably weaken. Although the demand for LPG from the PDH industry may perform well, the sluggish PDH unit profit may hinder the future LPG demand improvement. Therefore, it is predicted that China’s LPG prices may edge up in H1 May and then move downward with rising supply and tepid civil-use gas demand.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
