According to JLC, the domestic LPG market in late June initially saw a rapid decline before stabilizing toward the end of the month. The easing of geopolitical tensions in the Middle East and the rapid dissipation of the risk premium associated with shipping disruptions in the Strait of Hormuz caused international crude oil prices—as well as the landed costs of imported propane and butane—to slide continuously, effectively returning to pre-conflict levels; this exerted downward pressure on the domestic market. A bearish outlook among industry players prompted upstream enterprises to actively offload inventory, while downstream buyers limited purchases to essential needs at lower price points; the resulting lukewarm market sentiment drove prices steadily downward. JLC monitoring shows the average national LPG index for this period was 5,372, down 785 points (12.76%) from the previous period.
Regarding residential-use LPG: The market experienced a sharp decline during this period, with lackluster trading activity; the average index stood at 5,450 points, down 837 points (13.31%) month-on-month. Although domestic refinery maintenance remained concentrated and overall supply was low, terminal demand weakened as temperatures rose. Additionally, an increase in incoming import shipments caused terminal prices to fall, rapidly narrowing the price gap with domestic gas—a bearish factor for the domestic product. Coupled with prevailing market pessimism, this pushed residential LPG prices lower.
Regarding imported LPG: Prices trended steadily downward throughout the period, with the average index at 5,856 points, a drop of 1,102 points (15.83%) month-on-month. The easing Middle East situation and unhindered strait navigation led to a significant drop in import costs. With a substantial increase in incoming shipments expected later, importers lowered prices early to stimulate sales; however, due to insufficient domestic demand and tepid market sentiment, the price decline was steeper than that of domestic residential LPG.
Regarding feedstock gas: Prices initially fell before rebounding slightly, with the average index at 4,949 points, down 451 points (8.36%) month-on-month. International crude oil prices experienced a sharp decline, and low operating rates at downstream deep-processing units resulted in weak essential demand for feedstock gas, causing prices to fall across the board. Towards the end of the month, driven by healthy profit margins in deep processing, alkylation unit operating rates rose; this, combined with tight supplies and improving market fundamentals, supported a gradual stabilization and slight rebound in prices.
The domestic liquefied petroleum gas (LPG) market is expected to fluctuate at low levels during the first half of July, with price centers remaining below June levels. The July Contract Price (CP) dropped significantly, lowering import costs and leading to a gradual rise in import volumes. Supply structures vary by region: supplies in Shandong have decreased, while an increase is anticipated in East China, keeping overall supply relatively low. Demand patterns are divergent; residential fuel demand remains sluggish, whereas demand from the chemical sector is expected to rise. Overall, there is still room for a decline in domestic LPG prices during the first half of July.
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