Price Trend

The propane Market as a whole rose this week. At the beginning of the week, the average propane market price was 3650 yuan/ton, and at the end of the week, it was 3692.5 yuan/ton. Within the week, the price increased by 1.16%, which was 31.06% lower than that of the same period last year.

II. Analysis of Influencing Factors

Product: This week, the propane Market in China was first restrained and then increased, and the market turnover atmosphere improved. As of August 30, the propane self-use of Dongming Petrochemical Company in Shandong Province stopped. Propane ex-factory price of Tianjin Bohai Chemical Group Supply and Marketing Company is 3600 yuan/ton, Shandong Haiyou Petrochemical Group is 3700 yuan/ton, Shandong Dongying Hualian Petrochemical Company is 3600 yuan/ton, Shandong Huifeng Petrochemical Company is 3750 yuan/ton, Shandong Hengyuan Petrochemical Company is propane ex-factory price. The factory price is 3720 yuan/ton, and the factory price of propane of Binzhou Dayou Group is 3700 yuan/ton. Propane ex-factory price of Shandong Zhonghai Fine Chemical Co., Ltd. is 3700 yuan/ton, and that of Sinopec Qingdao Refinery and Chemical Co., Ltd. is 3400 yuan/ton.

Industry chain: After the domestic liquefied petroleum gas (Shandong) market fell this week, it rebounded slightly. Prices fell for two consecutive days at the beginning of the week, falling by about 50-100 yuan/ton. Inventories of factories accumulated to the highest level last weekend. Petrochemical enterprises also continuously lowered prices on non-price-adjusting days to stimulate downstream market entry. Other units mainly followed the decline and timely replenishment of downstream markets. Market shipments have increased significantly and manufacturers’inventory has eased. Since Wednesday, the price of international crude oil has been rising continuously, which is good for the market mentality. The downstream bullish mentality has been restored. The enthusiasm of entering the market is good, and the shipments of manufacturers are smooth.

At the beginning of the week, propane was steadily downward, with weak trend, no favorable market support, more on-demand replenishment in the downstream, low enthusiasm for entering the market, low overall market atmosphere, the accumulation of manufacturer inventory, profit-based delivery. Late in the week, international crude oil rose steadily, domestic liquefied petroleum gas spot followed the upward trend, coupled with the introduction of CP price in September, butane was flat compared with last month, propane was slightly lower than last month, the decline was less than expected, which boosted the market mentality. Under the downstream buy-up mentality, replenishment into the market, the market transaction atmosphere improved, manufacturers shipped more smoothly, inventory pressure eased, and there is no obvious pressure on inventory at present. On the demand side, the traditional peak season “gold, silver and ten” is coming, and the market demand is expected to improve, which will play a supporting role in the market.

Saudi Amy Corp. announced in September that the price of propane was lowered and the price of butane was flat. Propane was $350 per ton, down by $20 per ton from last month; butane was $360 per ton, flat from last month. The cost of long-term approximate cargo propane converted to onshore is around 3 022 yuan/ton and that of butane 3100 yuan/ton.

Industry: According to the price monitoring of business associations, there are 25 kinds of commodities rising annually in the chemical sector in the 33-week (8.19-8.23) rise-fall list of commodity prices in 2019, of which more than 5% increase is 3.6% of the monitored commodities in the plate; the first three commodities are acetic acid (8.90%), crude benzene (7.83%) and aniline (5.17%). There are 30 kinds of commodities with a decline of more than 5%, accounting for 4.8% of the monitored commodities in this sector. The products with the first three declines are hydrochloric acid (-7.50%), dichloromethane (-7.35%) and sulfur (-5.48%). This week’s average rise and fall was 0.03%.

3. Future Market Forecast

Propane analysts of business associations believe that although CPs prices fell in September, the decline was less than expected, which supported the market to a certain extent. In addition, demand in September is expected to improve. There is no obvious pressure on manufacturers’inventories at present, and the mood of protecting the market is obvious. It is expected to continue to rise next week or continue.