SunSirs: Shandong LPG Continued to Decline in May

Price trend

In May, Shandong LPG continued its downward trend and saw a broad decline. According to data monitoring by SunSirs, the average price of LPG in the civilian Shandong market was 5,126 RMB/ton on May 1st, and 4,114 RMB/ton on May 31st. The monthly decline was 19.74%, and a decrease of 33.51% compared to the same period last year.

Analysis review

In May, the decline in the Shandong LPG market intensified. At the beginning of the month, downstream pre holiday restocking basically ended, and demand returned to a weak position. After the May Day holiday, prices fell significantly. Subsequently, crude oil fell multiple times, and the news suppressed the market mentality. At the same time, the concentration of low-priced cargo sources at ports further impacted the domestic market. With the rise of temperature, the demand for civilian heating decreased, and the demand from chemical industry decreased due to the tightening of profits. Downstream construction decreased, and the bearish situation was concentrated and released. The weak trend continued until the end of the month. As of May 31st, the mainstream quotation for LPG in the civilian market in Shandong region was 4,100-4,150 RMB/ton.

In May, the LPG futures market fluctuated and fell, and international oil prices continued to be volatile and weaker. Cost side support was limited, and demand was weak. Terminal consumption capacity was weak, and combustion demand had reached a low point. In the short term, the demand for LPG is limited, and the decline in costs is a blow to market confidence, mainly volatile and weaker.

Market outlook

Overall, when prices were low, downstream entered the market and the transaction atmosphere improved, but the increase in civilian demand during the off-season was limited. It is expected that the probability of the Shandong LPG in civilian market continuing to decline in the short term will increase.

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