- Price Trend
Influenced by the international crude oil price, the China domestic LPG (Shandong) market rose for two consecutive days. On September 15, the average price of LPG market was 3,656.67 RMB/ton, and on September 17, the average price was 3,850 RMB/ton. The two-day increase was 5.29%, and the price fell 22.16% compared with the same period last year.
- Analysis of Influencing Factors
Crude Oil: On September 14, two Saudi Aramco factories were attacked, causing a temporary disruption of Saudi production capacity of about 5.7 million barrels per day, which is about 5% of current global crude oil production. It is rare for so many crude oil production capacities to be interrupted in the short term. It is reported that the oil supply disruption in Saudi Arabia is the most serious in history, surpassing the oil supply disruption in Kuwait and Iraq in August 1990 and the loss of Iranian oil production during the Islamic Revolution in 1979. Affected by the incident, international oil prices soared sharply. On Monday (September 16), the price of WTI crude oil futures rose sharply to $62.90 per barrel, an increase of $8.05, and Brent crude oil futures rose sharply to $69.02 per barrel, an increase of $8.8. In particular, Brent crude oil, which opened on September 16, rose rapidly more than 10%, surging nearly 19% in the session, its highest level in nearly four months.
International crude oil prices soared, which boosted the international spot market. CFR prices of frozen propane rose $57/ton and butane rose $62/ton, which is about 440-480 RMB/ ton.
September is the traditional sales peak season of LPG, but due to the slow increase in terminal demand and limited consumption capacity, the market is difficult to substantially improve. Since September, it has been mainly a narrow adjustment. However, the soaring international oil price and the rising international spot market ushered in a wave of boosts in the domestic liquefied gas market, which continued to be tepid, with a one-day increase of more than 4% and a two-day increase of 5.29%. In October, CP price is expected to rise sharply, and the price of LPG will rise in a straight line. In recent days, local refineries have also raised prices broadly, and the civil price of LPG in some areas has exceeded 4,000 RMB/ton. However, the LPG market had been in general before, and some operators were still cautious.
- Market Forecast
LPG analysts believe that: at present, downstream buying enthusiasm is still in, coupled with the gradual cooling of the weather, market demand has rebounded, the National holiday is approaching, there is still demand for replenishment downstream, and the trend is still strong in the short term. However, the probability of further large-scale increase in the latter part of the year is limited, and it is expected that there will be a slight increase in late September.
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