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SunSirs: In April, Propane Market Rose First and Then Declined, and the Overall Focus Moved Down

May 07 2021 14:15:31     SunSirs (John)

Price trend

The propane market rose first and then fell in April. On the whole, the price fell in April. According to the data monitoring of SunSirs, the average market price of propane on April 1 was 4,515.75 RMB/ton, and the average price on April 30 was 4,413.25 RMB/ton. The overall decline in April was 2.27%, an increase of 10.89% compared to March 1.

Analysis review

The Shandong propane market as a whole in April is divided into two phases, the first half of the month and the second half of the month. Let's first look at the first half of the month. In the first half of the month, the propane market continued to rise, with the price breaking through 4800 RMB/ton. After the Ching Ming holiday, the Shandong propane market showed a continuous upward trend, mainly due to low market supply support. Entering April, the market began to overhaul one after another, and the market supply has decreased, which has brought obvious support to the market. Secondly, the international crude oil surge during the period brought obvious benefits to the market. After the holiday, there was a certain replenishment demand for downstream stocks, the market was more active, the market transaction atmosphere was better, the upstream inventory was low, the factory mentality was good, and the prices had been pushed up to high levels one after another.

However, in the second half of the month, it began to fall all the way, forming a clear contrast with the continuous upward trend in the first half of the month. In the second half of the month, the northern and southern markets were adjusted downwards simultaneously, but the decline in the northern market was more pronounced than that in the southern market. The main reasons for the decline are as follows. Firstly, due to the impact of low port prices in the East China market, refineries were forced to lower their prices. Secondly, in terms of crude oil, international crude oil began to fluctuate and fall on the 18th, which provided weak support to the market. Finally, on the demand side, since the overall domestic market demand was at a weak level, under the condition of sufficient supply, the downstream mostly maintained periodic replenishment, the refinery's shipment situation was average, and the inventory continued to accumulate, resulting in successive weaker price adjustments.

Saudi Aramco's CP announced in May that all propane and butane have been adjusted downwards. Propane is 495 US dollars/ton, down by 65 US dollars/ton from last month; butane is 475 US dollars/ton, down by 55 US dollars/ton from last month.

Market outlook

The current Shandong propane market price has fallen back to below 4500 RMB/ton. At the end of the month, as the CP price fell in May, the decline in the cost of imported gas brought negative factors to the market. In terms of demand, market demand is at a weak level, and downstream purchases are mostly on-demand. Later, as the temperature rises, demand is still expected to be weak. However, after the May Day holiday, there will be replenishment operations in the lower reaches of the market. It is expected that the propane market may have a small increase in the short term, but in the long term, it may still fall mainly.

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