Price Trend

The propane market continued to fall in January. At the beginning of the month, the average market price of propane was 4500 yuan/ton, and at the end of the month, the average price was 4087.5 yuan/ton. The price dropped by 9.17% in the month and 16.07% compared with the same period last year.

II. Analysis of Influencing Factors

Products: Propane prices have fallen continuously this month, with a large margin, and the market climate has weakened. As of January 31, propane from Dongming Petrochemical Company and Zhonghai Fine Chemical Company of Shandong Province were not quoted for the time being. The ex-factory price of propane in Tianjin Bohai Chemical Industry Group is 4200 yuan/ton, that in Shandong Haiyou Petrochemical Group is 4150 yuan/ton, that in Shandong Huifeng Petrochemical Company is 4100 yuan/ton, that in Shandong Hengyuan Petrochemical Company is 4150 yuan/ton, and that in Shandong Binzhou Dayou Group is 4100 yuan/ton.

Industry chain: In January, the price of domestic liquefied gas market rose first and then fell. At the beginning of the month, the average price of domestic liquefied gas market was 3900 yuan/ton, and at the end of the month it was 3900 yuan/ton, which was the same as that at the beginning of the month. The price was 12.85% lower than that of the same period last year. Domestic propylene (East China) prices fluctuated and fell in January. At the beginning of the month, the average price of domestic enterprises was 8010 yuan/ton, and at the end of the month, the average price of domestic enterprises was 7880 yuan/ton. In the month, the price fell by 1.62%, which was 5.56% lower than that of the same period last year. In February, Saudi Arabia Americans CP: Propane 440 US dollars/ton, up 10% from last month. Butane is $470 per ton, up 50% from last month. Spot conversion cost is 3522 yuan/ton for propane and 3745 yuan/ton for butane.

The propane market did not perform well in January and prices continued to fall. In the first half of the month, the price of the main refinery dropped sharply, affecting the mindset of the operators. The downstream bearish market atmosphere is strong, the enthusiasm for entering the market is not high, and more on-demand replenishment is needed. The manufacturers’shipments continue to be poor, and inventory is gradually depressed. In the second half of the month, the liquefied petroleum gas market continued to fall, the short market and the price continued to fall. However, with the Spring Festival approaching, the demand for downstream stocks, the market turnover improved, the inventory situation of manufacturers improved, and the introduction of a small increase in CP in February, the price stabilized.

Industry: According to the price monitoring of business associations, in January 2019, there were 27 commodities rising annually in the chemical sector, of which 14 commodities increased by more than 5%, accounting for 19.7% of the monitored commodities in the sector; the first three commodities were sulfuric acid (26.53%), phosphate ore (19.12%) and n-butanol (industrial grade) (14.52%). There are 41 kinds of commodities with a decline of more than 5%, accounting for 21.1% of the monitored commodities in this sector. The products with the first three declines are TDI (-23.96%), ethylene oxide (-19.35%) and acetic acid (-9.91%). This month’s average rise and fall was -0.13%.

3. Future Market Forecast

Propane analysts of business associations believe that the introduction of CPs in February, a slight rise, good market mentality. However, when the downstream replenishment is over and inventory is depleted one after another, and the Spring Festival holidays are approaching, manufacturers are facing more holidays. It is expected that the future market will be stable.