Price Trend

In July, the domestic liquefied petroleum gas (Shandong) market suffered from twists and turns, and the overall decline was dominant. At the beginning of the month, the average price of domestic liquefied gas market was 3816.67 yuan/ton, and at the end of the month, it was 3716.67 yuan/ton. The price fell by 2.62% in the month, 13.58% compared with the same period last year.

II. Analysis of Influencing Factors

Products: In July, the domestic liquefied gas market declined as a whole. Up to July 31, the liquefied gas of Sinopec Qingdao Refinery and Chemical Company was stopped and no offer was made. The ex-factory price of liquefied gas of Sinopec Guangzhou Branch is 3200 yuan/ton, that of Sinopec Jingmen Branch is 3450 yuan/ton, that of Sinopec Shanghai Petrochemical Company is 3310 yuan/ton, that of Shandong Jincheng Petrochemical Group is 3500 yuan/ton, and that of Sinopec Shijiazhuang Refining and Chemical Branch is 3450 yuan/ton. The ex-factory price is 3450 yuan/ton. Sinopec Luoyang Petrochemical Liquefied Gas ex-factory price is 3500 yuan/ton.

Industry chain: The domestic market of dimethyl ether rose steadily in July. At the beginning of the month, the average price of domestic dimethyl ether Market was 3095 yuan/ton. At the end of the month, the average price was 3210 yuan/ton. The increase rate was 3.72% in the month, and the price fell by 30.29% compared with the same period last year. In July, the propane Market tumbled. At the beginning of the month, the average market price of propane was 3700 yuan/ton, and at the end of the month, it was 3602.5 yuan/ton. The price dropped by 2.64% in the month, and increased by 24.88% compared with the same period last year. Saudi Amy Corp. announced in August that the price of propane was narrowly lowered and the price of butane was narrowly increased. Propane was 370 US dollars/ton, down 5 US dollars/ton from last month; butane was 360 US dollars/ton, up 5 US dollars/ton from last month. The cost of long cargo propane is about 3056 yuan per ton on shore and 2980 yuan per ton on butane.

In July, liquefied petroleum gas (LPG) shocks declined, with narrow adjustment being the main factor. In early July, CP prices fell, bearish market mentality, prices continued to fall. Then there was a boost, mainly due to the rise in international crude oil, which boosted liquefied petroleum gas. However, the current market demand is in the off-season, the terminal consumption rate is declining, the market performance is poor, the push-up is weak, and the price information speed is falling. Until the last week, as prices continued to fall, the downstream market entered the market at a low price, the upstream inventory was released, coupled with the rise in international crude oil, the price tentative rose slightly. However, the terminal has not been significantly improved, the downstream continuous replenishment capacity is insufficient, rising first and then falling at the end of the month.

Industry: According to the price monitoring of business associations, in July 2019, there were 7 kinds of commodities rising annually in the energy sector, including 4 kinds of commodities with an increase of more than 5%, accounting for 25% of the monitored commodities in the sector; the top three commodities were MTBE (12.29%), diesel (8.34%) and gasoline (8.07%). There are 9 kinds of commodities falling annually, and 2 kinds of commodities falling by more than 5% accounted for 12.5% of the monitored commodities in the plate. The products of the first three declines were methanol (-9.55%), petroleum coke (-6.15%) and Brent crude oil (-2.75%). This month’s average rise and fall was 0.98%.

3. Future Market Forecast

Liquefied gas analysts in business associations believe that the current market demand is still in the off-season, terminal consumption is declining, and the market performance is not good. In August, CPs showed a slight decline, negative market mentality, and the liquefied gas market lacked obvious advantages. It is expected that there will be little room for price increase in August, with narrow adjustment as the main factor.