Price Trend

In July, the propane Market tumbled. At the beginning of the month, the average market price of propane was 3700 yuan/ton, and at the end of the month, it was 3602.5 yuan/ton. The price dropped by 2.64% in the month, and increased by 24.88% compared with the same period last year.

II. Analysis of Influencing Factors

Products: Propane price shocks this month, the market atmosphere is general. As of July 31, propane in Shandong Dongming Petrochemical and Sinopec Qingdao Refinery and Chemical Co., Ltd. was not quoted for the time being. The ex-factory price of propane in Tianjin Bohai Chemical Industry Group is 3800 yuan/ton, Shandong Haiyou Petrochemical Group is 3530 yuan/ton, Shandong Huifeng Petrochemical Company is 3680 yuan/ton, Shandong Hengyuan Petrochemical Company is 3650 yuan/ton, Shandong Binzhou Dayou Group is 3650 yuan/ton./ The ex-factory price of propane in Shandong Zhonghai Fine Chemical Co., Ltd. is 3550 yuan/ton, and that in Shandong Yuhuang Shengshi is 3600 yuan/ton.

Industrial chain: In July, the domestic liquefied petroleum gas (Shandong) market was tortuous and the overall decline was dominant. At the beginning of the month, the average price of domestic liquefied gas market was 3816.67 yuan/ton, and at the end of the month, it was 3716.67 yuan/ton. The price fell by 2.62% in the month, 13.58% compared with the same period last year. In July, the domestic propylene (Shandong) market shocked upward. At the beginning of the month, the average price of propylene in China was 7669 yuan/ton, and at the end of the month it was 7957 yuan/ton. The price rose by 3.76% in the month and fell by 8.7% compared with the same period last year. Saudi Amy Corp. announced in August that the price of propane was narrowly lowered and the price of butane was narrowly increased. Propane was 370 US dollars/ton, down 5 US dollars/ton from last month; butane was 360 US dollars/ton, up 5 US dollars/ton from last month. The cost of long cargo propane is about 3056 yuan per ton on shore and 2980 yuan per ton on butane.

In July, the propane Market showed a general performance, with major shocks. At the beginning of this month, CP price was introduced in July, propane fell by 55 US dollars, import cost fell further, international crude oil fell sharply, double negative, downstream entry enthusiasm was not high, manufacturers’shipments were flat, and propane market prices continued to decline. However, with the obvious rise of international crude oil, the propane market has been boosted, leading refineries have been actively pushing up, and prices have stopped falling and rebounded. Although the enthusiasm of downstream market entry has improved, with the price rising, the enthusiasm of downstream purchasing has declined again, with the price falling mainly in the middle of the month. Until the end of the month, the price of CPs was introduced in August, and then the price was adjusted back. With the coming of summer in July, the market demand continues to be weak. The main reason for the decline is the insufficient terminal demand. The downstream market is mainly short-sighted and cautious in entering the market.

Industry: According to the price monitoring of business associations, in June 2019, there were 34 commodities rising annually in the chemical sector, of which 11 commodities increased by more than 5%, accounting for 13.1% of the monitored commodities in the sector; the top three commodities were epichlorohydrin (20.33%), hydrochloric acid (20.00%) and calcium carbide (11.04%). There are 43 kinds of commodities with a decline of more than 5%, accounting for 19% of the monitored commodities in this sector. The products with the first three declines are hydrogen peroxide (-21.81%), silicone DMC (-17.38%) and butanone (-13.71%). This month’s average rise and fall was -0.38%.

3. Future Market Forecast

Propane analysts at business associations said that CPs fell slightly in August, little changed from last month. At present, insufficient terminal demand is the main reason for the decline. July is the weakest month of propane demand. The market is expected to improve in August. There is little room for a short-term decline. The trend in August is expected to decline first and then rise.