1、 Price trend

In February, the domestic liquefied gas (Shandong) market fell as a whole, with a trend of first falling, then rising and then falling. At the beginning of the month, the average price of the domestic LPG market was 4383.33 yuan / ton, and at the end of the month, the average price was 3700 yuan / ton, with a 15.59% drop in the price within the month, and the price was 7.88% lower than that of the same period last year.

2、 Analysis of influencing factors

Product: the price of domestic LPG market fluctuated in February. As of February 28, the outgoing price of LPG of SINOPEC Guangzhou Branch is 4010 yuan / ton, that of Sinopec Jingmen Branch is 4400 yuan / ton, that of Sinopec Shanghai Petrochemical Co., Ltd is 3920 yuan / ton, that of Sinopec Qingdao Refining & Chemical Co., Ltd is 3800 yuan / ton, and that of Sinopec Shijiazhuang Refining & Chemical Co., Ltd is 3550 yuan / ton. The price of Sinopec Luoyang Petrochemical LPG is 3850 yuan / ton.

In February, the liquefied gas (Shandong) market fell mainly, with large fluctuations during the period. At the beginning of the month, affected by public events, the Spring Festival holiday was extended, transportation was blocked, the downstream work resumed slowly, the terminal demand was reduced, the market transaction atmosphere was cold, the manufacturer’s shipment was blocked, and the inventory was gradually increased, so the production had to be controlled by production reduction or shutdown, and the price of liquefied gas was continuously lowered. In the middle of the month, the number of enterprises returning to work increased, the market demand increased, and the traffic and transportation recovered. With the continuous reduction of the price to the low level, the downstream market entered the market for staged replenishment, coupled with the significant increase of international crude oil, the market showed a continuous upward trend. But near the end of the month, with the rise of public events, international crude oil fell sharply, especially WTI crude oil fell to a new low in the past year. And in March, CP is expected to fall, which is a negative market mentality. The downstream market is mostly delisted and consumes inventory, and the wait-and-see is the main thing. The market transaction atmosphere turns weak, and liquefied gas falls into a downward situation again.

Saudi Aramco announced in March that the price of propane and butane were lowered. Propane fell to $430 / T, down $75 / T from last month, and butane to $480 / T, down $65 / T from last month. It is estimated that the c.i.f. cost of long-term propane is about 3810 yuan / ton, and butane is about 4196 yuan / ton.

Industry: according to the price monitoring of the business association, there are three kinds of commodities in the rise and fall list of bulk commodity prices in February 2020, among which one is more than 5%, accounting for 6.3% of the monitored commodities in the energy sector; the top three commodities are petroleum coke (26.38%), dynamic coal (2.09%) and coking coal (0.79%). There are 12 kinds of commodities falling on a month on month basis, and 7 kinds of commodities falling by more than 5%, accounting for 43.8% of the number of commodities monitored in the sector; the top three products falling are liquefied gas (- 15.59%), MTBE (- 15.56%), dimethyl ether (- 10.08%). This month’s average rise and fall was – 3.68%.

3、 Future forecast

In March, CP price was introduced, and propane butane fell sharply, which was a negative market mentality. At present, although the upstream inventory is controllable, but the downstream has not been fully resumed, and the terminal demand is still limited. In the short term or continue to be weak. In the long run, with the slow increase of resumption of work and the expected growth of demand, the market may have a rebound under the support of low supply.