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SunSirs: Can't stand it! Shandong propane market drops sharply in the short term
March 20 2020 09:55:43SunSirs(Molly)

Price trend

 In the past 10 days, the Shandong propane market has fallen sharply, with a larger margin. According to data from SunSirs, the average market price of propane (Shandong) on ​​March 9 was 3782.5 yuan / ton, and the average price on March 19 was 2950 yuan / ton, only 10 days, with a decline of up to 22.01% during the same period, a 28.53% drop from the same period last year. . It can be seen from the figure that after the Spring Festival holiday, the propane market as a whole was in a downward trend, and there were two small rebounds during the period, but under multiple negative conditions, the resistance was greater and it returned to the downward trend. This month was even more affected by international crude oil. The international crude oil market plummeted. Propane fell along with the trend of crude oil, hitting a new low of nearly three years.

Drop of 6.57% within a single day

After the holiday, although the overall propane market showed a downward trend, there were two small rebounds during the period. As a whole, starting from March, the propane trend followed the crude oil, and the price was relatively firm at the beginning of the month. Although there was a downward trend, the magnitude was not large. After entering this week, the price drop has gradually increased, and the price in the Shandong market has continued to fall, only 6.57% in a day on March 19. On the morning of the 19th, international crude oil plummeted again, the cost of imported gas fell, and the bearish market mentality. The downstream wait-and-see attitude was obvious. Be cautious in entering the market. The propane market trading atmosphere continued to be sluggish and did not improve significantly. CP is currently expected to fall in April, the news has increased the profit hollow state. Although the terminal consumption has recovered from the previous period, it has not been fully opened. Upstream shipments have continued to be blocked, inventory has gradually increased, and continuous large profits have been made, mainly on shipments.

International Crude Oil

On March 16, the price of the US WTI crude oil futures market fell sharply and fell below 30 US dollars per barrel again. The main contract was reported at 28.70 yuan per barrel, a decrease of 3.03 US dollars (-9.55%). Brent crude oil futures market prices fell sharply, the main contract was reported at 31.69 US dollars / barrel, a decline of 3.75 US dollars (-10.58%). The main reason is that the global epidemic has deteriorated in recent days, which has intensified people's blockade measures against the government to curb the spread of the epidemic, which may trigger a sharp contraction in economic activity, which in turn has aggravated the general concerns of market participants about the global economic recession. Superimposed on Monday, Saudi Arabia reiterated its plan to increase production, with a clear attitude, which further worsened the market.

Latest Saudi CP prices

Saudi Aramco announced in March that the price of propane was reduced and the price of butane was reduced. Propane fell to US $ 430 / ton, down US $ 75 / ton from last month; butane was US $ 480 / ton, down US $ 65 / ton from last month. The estimated landed cost of long-term cargo propane is about 3810 yuan / ton, and butane is about 4,196 yuan / ton.

Market Forecast

At present, the crude oil plunge bearish the market mentality and the downstream market are more bearish. Therefore, buyers are more cautious and wait and see. Although terminal consumption has recovered from the previous period, it has not yet been fully opened, and market demand has yet to be improved. Manufacturers' current shipments are light, inventory is gradually accumulating, and continuous substantial profit is provided. It is expected that in the short term, the propane market will still be greatly affected by crude oil, and prices will tend to fall and rise.

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