SunSirs: Propane Welcomes A Good Start in July, with a Rise of Over 6%

Price trend

Entering July, the propane market is welcoming the rise, and the beginning of the month ushered in a good start. According to the data monitoring of SunSirs, the average market price of propane in Shandong was 4,543.25 RMB/ton on July 1, and the average price on July 6 was 4,832.25 RMB/ton. The rate of increase during the period was 6.49%, an increase of 66.55% compared with the same period last year.

Analysis review

After entering July, the price of propane market in Shandong continued to push up. After the introduction of CP in July, both propane and butane rose sharply, and the high import cost brought a significant boost to the domestic market. The sharp rise in the international crude oil market also brought favorable support to the market. Both the southern and northern markets increased in varying degrees. As of the 6th, the northern market continued to push up in North China, while Shandong stabilized, only with sporadic adjustments, and the northeast had mostly stabilized prices. The price of propane in southern China in the southern market had been stable and some had risen, and the price was mostly at a high level.

Saudi Aramco’s CP announced in July that both propane and butane rose. Propane was 620 US dollars/ton, an increase of 90 US dollars/ton from the previous month; butane was 620 US dollars/ton, an increase of 95 US dollars/ton from the previous month.

On July 5, international oil prices rose. The United States coincided with the Independence Day holiday. The futures market was closed. The settlement price of the main contract in the Brent crude oil futures market was reported at 77.16 US dollars per barrel, an increase of 0.99 US dollars or 1.3%. The Organization of Petroleum Exporting Countries and its allies (OPEC+) once again reached a deadlock in their consultations. The meeting was suddenly suspended. As soon as the news broke that oil prices had risen sharply.

Market outlook

Although the northern market continues its upward trend, the growth rate has significantly narrowed compared to the previous period. Refinery inventories are mostly at a low level. In addition, the port price is strong, and the market is still positive. The downstream market is enthusiastic about entering the market under the fear of rising. However, due to seasonal factors, the current propane market demand is weak, which will bring some restraints to the rising market. It is expected that the propane market will rise first and then fall.