SunSirs: Energy, LPG market Ups and Downs in the First Half of 2019, "Forging ahead" in the Second Half of the Year

1. Price Trend

The year 2019 is coming to an end. Throughout the year, the domestic civil market of LPG ups and downs in the first half of 2019, "forging ahead" in the second half of the year. Compared with 2018, the trend is quite different, but still subject to seasonal factors. According to the monitoring data of SunSirs, the price of domestic LPG (Shandong) market rose slightly in 2019, during which most of the price was volatile. At the beginning of the year, the average price of LPG was 3,900 RMB/ton, and at the end of the year, the average price was 3,966.67 RMB/ton,, an increase of 1.17% in the whole year. It can be clearly seen from the price trend chart of LPG that in 2019, the highest price of domestic LPG appeared on April 26, the average price was 4,516.67 RMB/ton, the lowest price appeared on September 11, the average price was 3,640 RMB/ton, the maximum amplitude of the whole year was 19.41%, the annual fluctuation was large, and the price of LPG hit a new low within two years.

1. Market Analysis

The price trend of domestic LPG (Shandong) in 2019 can be roughly divided into four stages: the first stage is from the beginning of the year to the middle of March, with the high level of LPG market fluctuating; the second stage is from the middle of March to the beginning of May, with the price of LPG rising steadily; the third stage is from the beginning of May to the middle of September, with the price of LPG falling sharply and then fluctuating narrowly; the fourth stage is from the middle of September to the end of the year, with the price of LPG shaking continuously Swing, mainly upward, the specific trend is as follows:

The first stage: at the beginning of the year, the LPG market shows an upward trend. The market atmosphere and terminal demand are good, the shipment situation is good, and the seller's multi inventory is free of pressure. However, due to the continuous decline of CP, the cost of imported LPG continues to reduce, and during the Spring Festival holiday, the highway is forbidden to pass dangerous chemicals, the transportation capacity is reduced, and the manufacturers reduce the price of storage. After the Spring Festival, the demand for inventory and replenishment in the lower reaches, and the price started to fluctuate at a high level. However, spring is the traditional maintenance period of major refineries in China, and the overall supply of LPG market has decreased, so the price is relatively strong.

The second stage: with the rise of temperature, the domestic LPG market has opened an upward channel. In March, CP rose sharply, with an average increase of $50 / ton of butane, making the cost of intake gas rising. LPG continues to rise with the international crude oil price and the market is good. In terms of demand, the downstream buyer actively entered the market to replenish goods, and the price of LPG went up all the way, hitting a new high in the year on April 26.

The third stage: the LPG market fell sharply, down as much as 18.64% in 30 days. With the price of LPG rising to a relatively high level, the downstream mentality is cautious, and most of them are going out of the market to wait and see. Influenced by seasonal factors, the LPG market ushered in the traditional off-season with the continuous warming of the weather.

The fourth stage: the sales season starts in September. On September 15-18, the LPG market rose 9.12%. The main reason for this sharp increase is that Saudi Arabia incident led to the sharp rise of international crude oil, the rapid rise of international spot price, and the wide rise of LPG. Before the National holiday, the manufacturer mainly lowered the price and arranged the inventory. After the National holiday, the downstream inventory and replenishment demand, and the price rose again. After the peak sales season, affected by seasonal factors, the weather is cooling and the demand side is improving. In addition, the international CP has been rising continuously since October, and the imported gas is fluctuating upward. Under multiple favorable conditions, the LPG market is dominated by high volatility.

1. Market forecast

In 2019, the trend of LPG market fluctuates frequently, and the overall fluctuation range is not large, but it also complies with the natural law band arrangement, and the overall price is lower than that of previous years. In winter, there is still a certain consumption capacity in the terminal. At present, the price of LPG has been revised back, and the trend is strong. It is expected that in late December or continue to consolidate at a high level. In 2020, the market trend will still be affected by seasonality and international crude oil.

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