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SunSirs: China LPG Price Rises at the Beginning of 2021
January 08 2021 13:10:44SunSirs(Selena)

In 2021, the LPG market rose at the beginning of the year. Shandong civil gas continued to rise sharply in the first week of January, and the current quotation mostly exceeded the 4,000 RMB/ ton mark. According to the data monitoring of SunSirs, the average price of LPG in Shandong market was 3,490.00 RMB/ ton on December 31, 2020, and 4,083.33 RMB/ ton on January 7, 2021, with an increase of 17.00% in the first week and 28.95% compared with November 1.

After the introduction of the sharp rise of CP price in Saudi Aramco in January 2021, the LPG civil market began to increase the ex-factory price significantly during the New Year's Day. After the holiday, the rising route of the market remains unchanged, and the ex factory price continues to rise. At present, many plants in Shandong's civil gas market have broken through the 4,000 RMB/ ton mark, and the price has increased 400-700 RMB/ ton compared with that before the holiday. There are many positive factors in the market for the price increase. First of all, the cost of imported gas has risen sharply, supporting the upward price. Secondly, the international crude oil rose sharply on January 5, and the news was favorable to the market mentality. At present, the weather is cooling down obviously, the terminal demand has increased, and there is also a demand for replenishment after the festival. In addition, snow has appeared in some areas during the week, so there is a certain resistance in transportation. The manufacturer's shipment is smooth, the market transaction atmosphere is positive, so the price rises sharply.

In terms of international crude oil, on January 5, the price of WTI crude oil futures market in the United States rose sharply, with the settlement price of the main contract at $49.93/ barrel, up $2.31, or 4.85%. Brent crude oil futures market prices rose sharply, the settlement price of the main contract was $53.60/ barrel, up or $2.51, or 4.91%. International oil prices soared on Tuesday, with WTI and Brent crude oil up nearly 5%, mainly due to Saudi Arabia's unexpected announcement that it will voluntarily reduce production in February and March, and other OPEC+ member countries maintaining stable production.

After New Year's Day, the main players in LPG futures market brought obvious support to the spot market and the futures and spot both rose. On January 7, the opening price of LPG futures contract 2102 was 3,945, the highest price was 4,029, the lowest price was 3,933, the closing price was 3,953, the former settlement price was 3,957, the settlement price was 3,973, down 4, or 0.10%. The trading volume was 80,727, the position was 35,408, and the daily increase was -426. (Quotation unit: RMB/ ton)

At present, the civil price of LPG has risen to a relatively high level. Although the current rising trend has continued, the price has been pushed up too fast after the festival, the downstream's acceptance capacity is limited, and it is already in conflict with the high price. The market transaction atmosphere has obviously weakened compared with the previous period. With the weakening of downstream demand, LPG price may suspend rising in the short term in China.

 

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