1、 Price trend

In March, the domestic propane market continued to decline, with a large range. At the beginning of the month, the average price of propane market was 3717.5 yuan / ton, and at the end of the month, the average price was 2725 yuan / ton, with a drop of 26.7% in the month. The price was 35.08% lower than that of the same period last year.

2、 Market situation

In March, the trading atmosphere of propane market was light, and the price mainly fell. As of March 31, Shandong Dongming Petrochemical Co., Ltd. and Shandong Haiyou Petrochemical Co., Ltd. have no propane in stock, so they will not offer. The ex factory price of propane of Tianjin Bohai Chemical Group supply and marketing company is 2700 yuan / ton, that of Shandong HSBC Petrochemical Company is 2800 yuan / ton, that of Shandong Hengyuan Petrochemical Co., Ltd. is 2800 yuan / ton, that of Shandong Binzhou Dayou group is 2800 yuan / ton, and that of Sinopec Qingdao Refining Chemical Co., Ltd. is 2600 yuan / ton.

It can be seen from the figure that in March, due to the irrational decline of international crude oil, the price of propane Market naturally fell all the way, and the market never recovered. On March 2, the price of international crude oil rebounded sharply under the stimulation of multiple favorable factors, which boosted the mentality of propane Market. In addition, the price of CP was introduced in March, and the decline was less than expected. Downstream more buy up do not buy down mentality, mainly replenishment into the market. The manufacturer’s shipment was smooth, the inventory was released, and the price slightly pushed up. But the good times will not last long. On March 6, OPEC + cooperation collapsed, oil prices plummeted by more than 20%, and propane’s firmness is not there. It follows the trend of crude oil and falls sharply in the short term. On March 16, the international crude oil continued to decline, falling below $30 per barrel again, the cost of imported gas fell, and the propane market was once again depressed, falling 6.57% in just one day. The downstream continued to wait-and-see attitude, entered the market cautiously, and the trading atmosphere of propane market continued to be depressed, with no significant improvement. Until March 19, the price of WTI crude oil futures market in the United States rebounded sharply, which brought some benefits to the market. The terminal demand was higher than that in the earlier stage, and the market was able to stop falling and adjust narrowly. At the end of the month, the international crude oil dropped significantly, and the CP price was expected to fall broadly in April, and the propane market fell again.

International crude oil: in March, the international crude oil market staged an amazing avalanche, and the price suffered a “cut back”. According to the data monitored by the business agency, WTI crude oil fell by 57.34%, Brent crude oil fell by nearly 50%. The oil price collapse is naturally one of the “black swan” events in 2020. There are two main reasons: the sharp reduction of global demand caused by social and public events, and the supply risk caused by the “price war” of Russia and Saudi Arabia to increase production.

Latest CP price: Saudi Aramco announced in April that the price of propane and butane were lowered. Propane fell to $230 / T, down $200 / T from last month; butane $240 / T, down $240 / T from last month.

3、 Future forecast

The decline of propane Market in March was relatively large. The main reason for the decline was due to the impact of crude oil. CP’s expectation continued to fall, which continuously depressed the mentality of the industry. The manufacturer’s late shipment situation was light, and the price was constantly lowered to make profits. But during this period, the downstream continued to wait and see, with a more cautious attitude. At present, affected by seasonal factors, with the gradual warming of the weather, the propane market demand is expected to decrease. But at present, the price has been at a low level, and there is little room to fall. It is expected that the propane market will rise to a certain extent in April, and more attention should be paid to the trend of international crude oil.