SunSirs: China Shandong LPG Market steadily Rose in April

In April, the civilian LPG market in Shandong saw a climbing upward trend. According to data monitoring from SunSirs, the average price of LPG in the civilian Shandong market was 4,838 RMB/ton on April 1st, and 5,104 RMB/ton on April 26th. The monthly increase was 5.05%, a decrease of 0.82% compared to the same period last year.

In April, the LPG market in Shandong was significantly driven by demand. At the beginning of the month, upstream inventory was low, and downstream equipment resumed work, resulting in less demand stimulation and a rise in LPG prices. In the middle of the month, supported by stable downstream demand, some enterprises stopped production, resulting in sustained supply tightness in the region, and the price of LPG exceeded 5,000 RMB. The continuous upward trend continued until the end of the month, with high-end prices exceeding the prices of related propane products, leading to a weakening of combustion demand. Chemical demand tightened profits due to rising costs, resulting in a decrease in demand. As a result, LPG prices began to decline at the end of the month.

The LPG futures market continued to decline in April. As the temperature rises, the demand for combustion shifts towards the off-season. Although the profit margin of the PDH device has improved, the losses are still severe. The driving speed is likely to slow down in the later stage. Based on the fact that the demand for PDH has not significantly improved, futures prices continue to decline.

Overall, the current price of LPG has risen to a temporary high, and downstream resistance is evident, leading to an increase in inventory pressure. In addition, the decline in CP in May was introduced, further suppressing the mentality of industry players. It is expected that the LPG market will experience pressure and decline in the short term.

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