Price trend
In February, the domestic propane market fell mainly, with a large range. At the beginning of the month, the average price of propane market was 4732.5 yuan / ton, and at the end of the month, the average price was 3737.5 yuan / ton, with a drop of 21.02% in the month, 8.11% lower than the same period last year.
Analysis of influencing factors
Propane prices fell this month, with a flat trading atmosphere. As of February 28, Shandong Dongming Petrochemical Co., Ltd. and Shandong Haiyou Petrochemical Co., Ltd. have no propane in stock, so they will not offer. The ex factory price of propane of Tianjin Bohai Chemical Group supply and marketing company is 3650 yuan / ton, that of Shandong HSBC Petrochemical Company is 3770 yuan / ton, that of Shandong Hengyuan Petrochemical Co., Ltd. is 3700 yuan / ton, that of Shandong Binzhou Dayou group is 3650 yuan / ton, and that of Sinopec Qingdao Refining Chemical Co., Ltd. is 3800 yuan / ton.
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At the beginning of February, with the end of the Spring Festival holiday, the propane Market, which was supposed to go up, has fallen sharply this year (2020). The average ex factory price of propane Market (Shandong) before the festival (January 23) was about 4732.5 yuan / ton, and fell to about 3775 yuan / ton after the festival (February 3). The main reason is that affected by social public events, the Spring Festival holiday is extended, the downstream market is slow to return to work, the terminal demand is reduced, and the transportation is blocked, resulting in the overall transaction atmosphere of propane market is light. In order to stimulate the downstream market, the manufacturers kept making profits, but there was no obvious effect. The manufacturer’s inventory is gradually increasing, and the inventory pressure is increasing. Some manufacturers have to cut production or stop production to adapt to the market due to poor delivery.
The market remained depressed until a rebound in the propane Market occurred in the middle of the month. During this period, the broad rise of international crude oil has brought a certain boost to the market, and the rebound of civil gas has brought good results. At this time, with the gradual recovery of local transportation, the demand for inventory and replenishment in the downstream, the overall market transaction atmosphere has improved. The manufacturer’s shipment was relatively smooth, the inventory pressure was relieved, and the price continued to push up. On February 10, the average ex factory price of propane Market (Shandong) was about 3700 yuan / ton, and on February 21, it was about 4087.5 yuan / ton, with an increase of 10.47%.
Subsequently, the social public events are heating up. On February 26, WTI crude oil futures market in the United States continued the previous two trading days. The price continued to fall, with a large decline. The main contract was 48.73 yuan / barrel, down $1.17 (- 2.34%). Brent crude oil futures market price also continued to fall sharply, the main contract at 52.81 US dollars / barrel, down 1.45 US dollars (- 2.77%), especially WTI crude oil has fallen to a new one-year low. The sharp decline of international crude oil has depressed the mentality of the industry. The downstream market is mostly delisted, consuming inventory, and watching carefully. In addition, in March, CP expected to fall, the downstream market has not yet fully recovered, the terminal demand is limited, the overall atmosphere of the market turns to light again, and the price is weak.
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Latest CP price
Saudi Aramco announced in March that the price of propane and butane were lowered. Propane fell to $430 / T, down $75 / T from last month, and butane to $480 / T, down $65 / T from last month. It is estimated that the c.i.f. cost of long-term propane is about 3810 yuan / ton, and butane is about 4196 yuan / ton.
Forecast for future market
The propane market fluctuated a lot in the whole February, but the market that was supposed to rise in seasonal demand fell. Affected by social public events, the Spring Festival holiday is extended, traffic and logistics are blocked, and the downstream return to work is slow, resulting in poor market demand for the whole month. And the international crude oil continued to fall sharply at the end of the month, and the CP fell in March, which continuously depressed the mentality of the industry, and the downstream delisted mainly. At present, the price is constantly reduced to cost price, and there is limited space for later decline. With the slow resumption of work, there is still a demand for replenishment in the downstream, and it is expected that propane will stop falling in the later period.
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