China’s domestic liquefied petroleum gas market in August was dominated by weak consolidation

Price Trend



Domestic liquefied petroleum gas (Shandong) market tumbled in August. At the beginning of the month, the average price of domestic liquefied gas market was 3733.33 yuan/ton, and at the end of the month, it was 3730 yuan/ton. The price fell by 0.09% in the month, which was 20.79% lower than that of the same period last year.

II. Analysis of Influencing Factors

Products: In August, the domestic liquefied petroleum gas market price fluctuated narrowly and overall downward. As of August 30, the ex-factory price of liquefied gas of Sinopec Guangzhou Branch was 3180 yuan/ton, that of Sinopec Jingmen Branch was 3450 yuan/ton, that of Sinopec Shanghai Petrochemical Company was 3310 yuan/ton, that of Sinopec Qingdao Refinery and Chemical Company was 3390 yuan/ton, and that of Sinopec Shijiazhuang was 3450 yuan/ton. The liquefied gas ex-factory price of refinery branch is 3500 yuan/ton. Sinopec Luoyang Petrochemical Liquefied Gas ex-factory price is 3600 yuan/ton.

The narrow adjustment of liquefied petroleum gas (Shandong market) shocks in August is the main factor, and the international crude oil price still has a great impact on the liquefied petroleum gas market this month. In early August, liquefied petroleum gas prices continued to be low, downstream risky mentality into the market was positive, manufacturers shipped more smoothly, inventory pressure, and then pushed up. However, limited by the decline in international crude oil, the increase is not significant. In mid-August, the typhoon affected the production and transportation of the manufacturers, blocked shipment for several days in a row, and prices fell. Subsequently, the weather gradually weakened, shipments returned to normal, inventory was eased, and international crude oil pushed the market higher. But shipments have improved for a short time, although the traditional sales season is approaching, but demand is limited, coupled with the expected fall in September CP, downstream bearish on the future market, the enthusiasm for entering the market has faded. The shipment of the manufacturer returned to flat again, and the price fell again at the end of August. Until September CP was introduced, propane had fallen but less than expected, alleviating the market mentality and rising prices slightly.

Industry chain:


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The domestic dimethyl ether market continued to decline in August. At the beginning of August, the profit of dimethyl ether Market was relatively high. Some manufacturers started driving and the market supply increased, but the terminal demand was slow, the contradiction between supply and demand was prominent, and the price fell mainly. In mid-August, in order to avoid the continuous downward price, Henan Xinlian implemented the policy of keeping the bottom price for many times. Although it protected the market price on the side, it still did not alleviate the shipment situation of manufacturers. Inventory accumulated, pressure increased gradually, more profit was given priority to the shipment, and the price was lowered again. Until the end of August, the dimethyl ether Market did not improve substantially, and shipments continued to be cold and weak.



The propane Market as a whole rose slightly in August, mostly due to shocks. At the beginning of this month, CP price was introduced in August, propane slightly fell, which brought bad news to the market. In addition, the international crude oil fell sharply on August 2, which affected the market mentality. The enthusiasm for entering the market downstream was not high, the manufacturers’shipments were not smooth, and the main focus of propane price was to let profits drain away from the warehouse. But in mid-August, with the sustained upward trend of international crude oil, propane market was boosted, downstream market entry enthusiasm improved, manufacturers shipped smoothly, inventory pressure was not high, and prices stopped falling and rebounded. But August is still the traditional off-season of demand, the contradiction between supply and demand is prominent, coupled with the anticipated fall of CPs in September, the price rise is blocked. Until the end of August, when the CP price was introduced in September, propane dropped slightly compared with last month, but the decline was less than expected. The market mentality was supported and the price rose slightly.

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Saudi Amy Corp. announced in September that the price of propane was lowered and the price of butane was flat. Propane was $350 per ton, down by $20 per ton from last month; butane was $360 per ton, flat from last month. The cost of long-term approximate cargo propane converted to onshore is around 3 022 yuan/ton and that of butane 3100 yuan/ton.

Industry: According to the price monitoring of business associations, in August 2019, there were five kinds of commodities rising in the energy sector, of which more than 5% increased, accounting for 6.3% of the monitored commodities in the sector. The top three commodities were MTBE (8.16%), gasoline (2.24%) and methanol (1.22%). There are 11 kinds of commodities with a decline of more than 5%, accounting for 25% of the monitored commodities in this sector. The products with the first three declines are dimethyl ether (-9.03%), liquefied natural gas (-7.08%) and Brent crude oil (-6.28%). This month’s average rise and fall was -1.52%.

3. Future Market Forecast

Liquefied gas analysts believe that the traditional sales season is approaching, the market demand for liquefied gas is rising, and the Mid-Autumn Festival is approaching. Inventory replenishment is expected before and after the downstream festival, and prices are expected to stabilize and then rise in September.

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