As of January 28, the average propane price for January stood at 4,759 RMB/ton, up RMB160 or 3.48% month-on-month. Elevated import costs and tight supply-demand dynamics were the primary drivers.

Early in the month, rising propane production costs and higher import expenses provided robust bottom support. From a supply-demand perspective, overall supply remained low throughout January. Domestic supply showed limited changes, with some enterprises reducing output or suspending operations. Regarding imported resources, tight global supply coupled with geopolitical tensions resulted in relatively low import arrivals this month. Particularly in Shandong, limited imports combined with robust downstream demand for combustion and chemical applications drove continuous price hikes locally, prompting neighboring regions to follow suit. In southern regions, early-month imports were relatively scarce, driving price increases. Later, as imports increased, supply-demand conditions eased, causing prices to retreat from highs. Near month-end, the propane market remained firm at elevated levels. Supportive factors included high international prices, stable downstream combustion and chemical demand procurement, minimal upstream production and sales pressure, and manageable inventory levels.

Looking ahead to February, the propane market is expected to fluctuate at elevated levels, with limited room for significant price movements in either direction.

Internationally, February crude oil prices may fluctuate amid economic and geopolitical uncertainties. Excluding force majeure factors, WTI is projected to trade within $58–65/bbl, Brent within $63–70/bbl, and Oman within $59–66/bbl. Regarding overseas markets, propane cost prices are projected to remain elevated in February, providing favorable support for propane import costs.

From a supply-demand perspective, the approach of the Spring Festival holiday in early to mid-February will prompt both upstream destocking and downstream pre-holiday stockpiling. Logistics efficiency may decline, leading to cautious upstream shipments and pricing adjustments. However, current downstream demand for combustion and chemical applications remains relatively stable. Post-holiday, prices are anticipated to experience a temporary upward trend, supported by downstream restocking and elevated import costs. Overall, February prices are expected to consolidate at elevated levels.

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