Price trend
Entering this week, as the international crude oil rebounded, the propane market followed the rise. According to the data monitoring of SunSirs, the average market price of propane in Shandong on August 22 was 4,900.75 RMB/ton, and the average price on August 25 was 5,025.75 RMB/ton. The three-day increase was 2.55%, and it was an increase of 5.84% compared to the price on August 1.
Analysis review
Entering this week, the positive factors for the market are obvious. The domestic propane market has risen sharply, and the Shandong area has seen a significant increase. International crude oil prices have continued to rise sharply, which has given a significant boost to the market. The transaction atmosphere in Shandong is acceptable. Coupled with the support of high port prices, the price has been raised for three consecutive days, and the ex-factory prices have mostly risen above 5,000 RMB/ton. However, due to the current seasonal factors, the off-season has not passed, and the overall terminal demand is weak, which has brought certain restraints to the rising market.
In the international crude oil market, on August 24, the international oil price continued to rise, with a strong increase. The settlement price of the main contract in the US WTI crude oil futures market was reported at 67.54 US dollars per barrel, an increase of 1.90 US dollars or 2.90%, and the main contract settlement price in the Brent crude oil futures market was reported at 71.05 US dollars/barrel, an increase of 2.30 US dollars or 3.40%. On the news side, a fire on an oil platform in Mexico caused large-scale production interruptions. In addition, the American Petroleum Institute (API) data showed that US crude oil and refined oil inventories fell last week. After the peak of the epidemic in China, demand continued to recover, boosting market confidence.
Saudi Aramco announced CP in August that both propane and butane had risen. Propane was 660 US dollars/ton, an increase of 40 US dollars/ton from the previous month; butane was 655 US dollars/ton, an increase of 35 US dollars/ton from the previous month.
Market outlook
The continuous surge in international crude oil has clearly boosted the market. The domestic propane markets in both the north and south have risen to varying degrees. However, since the off-season has not passed, terminal demand has not increased significantly. As prices rise, downstream resistance has increased, the attitude is cautious, and mainly waits and sees, the market transaction atmosphere has weakened compared with the beginning of the week. It is expected that the propane market will rise steadily in the short term, but the possibility of a big rise is unlikely. The specific situation still needs to pay attention to the trend of international crude oil.
