SunSirs: China LPG Rose nearly 8% in the First Ten Days of June

According to the data monitoring of SunSirs, since June, the LPG civil market has been in a rising trend of shock. The average price of the LPG civil market in Shandong on May 31 was 2,660 RMB/ ton, and the average price on June 12 was 2,866.67 RMB/ ton, with an increase of 7.77% over the same period last year, with a decrease of 23.56% over the same period last year.

At the beginning of June, LPG was mainly used for civil use. The trend of international crude oil was good. On the June 2, WTI crude oil and Brent crude oil reached their highs in nearly three months respectively, and the price of CP issued by Saudi Aramco in June was higher than expected, all of which brought benefits to the market. LPG actively pushed up. The rise of civil gas in Shandong Province ranged from 50-100 RMB/ ton, and the national market also rose to varying degrees. Downstream mentality was good, the market replenishment was positive, the manufacturer's shipping situation was good, the price was firm, up for three days.

However, due to seasonal factors in June, the weather temperature is high, the market demand is limited, the terminal consumption is general, and the multi-dimensional rigid demand is maintained. As the price goes higher, the downstream generates a mentality of resistance. With the end of replenishment, the stock is withdrawn and consumed one after another. The market transaction atmosphere is obviously weakened. Some manufacturers give small profits to stimulate the downstream market, and the price is adjusted in a narrow range. International crude oil rose sharply over the weekend, and the news once again boosted the liquefied gas market, with manufacturers actively following up and prices generally rising. However, the terminal market did not improve significantly. Under the impact of crude oil crash on June 11, the market lacked favorable support, the enthusiasm of downstream market entry weakened, the pressure of manufacturers' shipment was large, and the overall weakness was reduced. At present, the supply in Shandong is relatively stable, and some manufacturers shut down.

The collapse of international crude oil has put pressure on the mentality of LPG market. On June 11, U.S. WTI crude oil futures market prices in the United States fell sharply, with the settlement price of major contracts at $36.34/ barrel, down $3.26 or 8.23%. Brent crude oil futures market prices fell sharply, with the settlement price of main contracts at $38.55/ barrel or 7.62%, mainly due to the restart of covid-19 concerns and the record high of U.S. crude oil storage. After the European countries and America restart the economic, the demand for crude oil has rebounded, but the worry that the outbreak will give a second strike to crude oil is growing. On last Thursday, U.S. stocks and commodity futures markets, represented by crude oil, tumbled, with worries dominating and risky assets selling again.

At present, LPG is in the traditional off-season, with limited demand in the terminal market, long replenishment period in the downstream, weak transaction atmosphere in the market, and large inventory pressure of many manufacturers. The main reason for the rise in June is driven by crude oil. At present, crude oil is weak and downward, and the market is actually good and limited. LPG is obviously constrained by demand, and the momentum for the subsequent rise is insufficient. It is expected that in the short term or weak narrow range consolidation is the main reason.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.