In January 2026, Saudi Aramco announced a second consecutive month of increase in contract prices (CP) for propane and butane, with the increase exceeding market expectations. On January 5th, the benchmark price of liquefied gas in SunSirs was 4,415.00 RMB/ton, an increase of 1.32% compared to the beginning of this month (4,357.50 RMB/ton).

CP rose more than expected in January, mainly due to tight supply

According to the released data, CP propane was reported at $525/ton in January 2026, an increase of $30 compared to the previous month; Butane is reported at $520/ton, up $35 month on month. This final value is about $20/ton higher than the recommended value by previous market institutions, showing an unexpected increase.

The core driving force behind this round of price increases comes from the tight spot supply in the Middle East region in January. Specifically, Saudi Aramco's own supply is tight, and Kuwaiti suppliers have no sales space for January shipment spot goods. At the same time, some January shipment plans of Abu Dhabi National Oil Company (ADNOC) have been postponed. The combination of multiple factors has led to market concerns about the supply of spot goods in January, thereby pushing up CP expectations. In addition, the fluctuating upward trend in the December South China Frozen Freight (CFR) also provided lateral support for the rise in CP.

Although the month on month increase, the year-on-year decrease is significant, and the long-term price is at a low level

Although CP achieved consecutive month on month increases in January, if the observation period is extended, the current price level is still significantly lower than the same period last year. Data shows that in January 2026, propane prices decreased by $100/ton year-on-year, a drop of 16%; Butane fell by $95/ton year-on-year, a decrease of 15.45%. Meanwhile, the price difference between propane and butane is also lower than the same period last year. This reflects that compared to early 2025, the overall price center of the liquefied gas market has significantly shifted downwards, and the current rise is more based on a rebound on a relatively low basis.

The guidance for crude oil is limited, and the future trend will return to its own supply and demand

The overall international crude oil prices in December showed a range oscillation pattern, with weak direct guidance for the liquefied gas market. The intertwining of long and short factors in the crude oil market: on the one hand, concerns about oversupply and economic prospects create pressure; On the other hand, the uncertainty of the geopolitical situation in the Middle East provides support. It is expected that crude oil prices will continue to fluctuate in January, making it difficult to form a unilateral trend for liquefied gas.

Therefore, the subsequent trend of the liquefied gas market will depend more on changes in its own supply and demand fundamentals. Based on current market signals, the possibility of future pressure is increasing.

In summary, the rise in CP in January was the result of short-term supply side disturbances resonating with seasonal demand. Looking ahead to the future, the expected increase in new production capacity on the supply side and the seasonal weakening of demand side jointly constitute downward pressure on prices. The cost side crude oil market is expected to remain volatile, making it difficult to provide strong support. Therefore, if unexpected events occur, after digesting the short-term positive factors in January, the CP price in February is likely to show a slight weak oscillation trend. In the future, it is necessary to focus on the actual production release progress of the Jiafula gas field and the temperature changes in spring.

If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.