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SunSirs: Narrow Adjustment of Domestic Liquefied Petroleum Gas (LPG) Market Last Week

September 12 2019 14:37:04     SunSirs (Selena)
  1. Price Trend

Last week, the domestic liquefied petroleum gas (LPG) (Shandong) market was mainly narrowly adjusted. At the beginning of the week, the average price of the domestic LPG market was 3,706.67 RMB/ton. At the end of the week, the average price was 3,683.33 RMB/ton. Within the week, the price fell 0.63%, 21.78% compared with the same period last year.

  1. Analysis of Influencing Factors

Products: Last week, the domestic LPG was narrowly adjusted and the trading atmosphere improved. As of September 6, the ex-factory price of LPG of Sinopec Guangzhou Chemical Co., Ltd. was 3,260 RMB/ton, that of Jingmen Petrochemical Co., Ltd. was 3,650 RMB/ton, that of Shanghai Petrochemical Co., Ltd. was 3,450 RMB/ton, that of Qingdao Petrochemical Co., Ltd. was 3,450 RMB/ton, and that of Shijiazhuang Petrochemical Co., Ltd. was 3,450 RMB/ton. The ex-factory price of LPG of Sinopec Shijiazhuang Refining and Chemical Company was 3,500 RMB/ton, and that of Luoyang Petrochemical Company was 3,600 RMB/ton.

Industrial chain: Dimethyl ether (DME): DME (Henan) market rose sharply last week, the off-season ended. In September, due to the influence of the gas market, the traditional sales season will come, and the market demand will improve, but there is no significant improvement at present. The main reason for this rebound is the strong rise of raw material methanol, the rise in cost has seriously reduced the profits of DME enterprises, some enterprises have been in a loss state, so there has been a stop-drop rebound. As a result, the DME Market is strong, with a 5.56% rise last week.

Propane: Last week, the propane Market began to pick up. Just entering the sales peak season, the market demand has not yet shown, but the main business inventory is mostly kept at a low level. Driven by the continuous rise of crude oil, coupled with the less than expected decline of CP, petrochemical enterprises took the opportunity to rise. Downstream enter the market, buy-up mentality under the market enthusiasm is higher, and the overall market production and marketing are smooth. At present, the market is on the rise, the market atmosphere is positive, but the increase is limited.

Saudi Arabian Amy Co. announced the September CP, that price of propane dropped and the price of butane remained the same. Propane was $350 per ton, down $20 per ton from last month; butane was $360 per ton, the same as last month. The cost of long-term approximate cargo propane converted to onshore is around 3,022 RMB/ton and that of butane 3,100 RMB/ton.

Industry: According to the price monitoring of SunSirs, in the 35th week (9.2-9.6) of 2019, there were nine kinds of commodities rising in the energy sector, one of which rose more than 5%, accounting for 6.3% of the monitored commodities in the sector; the first three commodities were dimethyl ether (5.56%), methanol (4.81%) and MTBE (4.43%). There were five kinds of commodities falling in the ring ratio. The first three products falling were coke (-3.74%), coking coal (-1.36%) and liquefied gas (-0.63%). This week's average rise and fall was 1.05%.

  1. Market Forecast

Liquefied petroleum gas (LPG) analysts from SunSirs believe that the market demand in Shandong has not improved significantly at present. Most of the manufacturers' inventory is above the median level, but the trend of the national market is good, and some areas are slightly upward. The downstream market is more confident about the future market, and the enthusiasm for replenishment is rising. In addition, the Mid-Autumn Festival holidays are approaching, the downstream inventory is expected to ease, and the market is prone to rise and fall. It is expected to rise steadily next week.

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