China Liquefied Petroleum Gas (LPG) Comprehensive Import CIF Price
21 April 2023
On April 19th, the China Liquefied Petroleum Gas (LPG) Comprehensive Import CIF Price Index released by the Global Trade Monitoring and Analysis Center of the General Administration of Customs and the Shanghai Petroleum and Natural Gas Trading Center showed that from April 10th to 16th, the China Liquefied Propane Comprehensive Import CIF Price Index was 117.92 points, a decrease of 1.4% month on month and 28.43% year-on-year; The comprehensive import landed price index of liquefied butane in China was 116.25 points, a decrease of 7.35% month on month and 31.93% year-on-year.
In terms of international pricing benchmarks, according to data released by Saudi Aramco's CP in April 2023; The contract price (CP) of propane in April was $555/ton, a decrease of $165/ton compared to the previous month, a decrease of 22.92% month on month, and a decrease of 40.96% compared to the same period last year; The contract price (CP) of butane in April was 545 US dollars per ton, a decrease of 195 US dollars per ton compared to the previous month, a decrease of 26.35% month on month, and a decrease of 43.23% compared to the same period last year; In April, Saudi Arabia's CP dropped significantly, which may affect the current domestic and international LPG market price level.
In terms of international prices, there is a high positive correlation between the international price of LPG and the price of crude oil. From the perspective of crude oil prices, international oil prices have continued to rise in volatile trading in the past week, forming a continuous four week upward trend. However, as the positive factors of tight supply are gradually digesting, the upward trend of oil prices has slowed down. After the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) oil producing countries announced in early April that they would further reduce production by 1.66 million barrels/day from May, the market's concern about the tightening supply prospect has driven the oil price up by nearly 7% in the first week of this month. This week, the United States announced that the inflation rate in March had slowed down, and the year-on-year growth rate had dropped to a low of nearly two years. The market's risk appetite has improved, and the dollar has subsequently weakened, At the same time, it also made the market speculate that the Federal Reserve is about to end its interest rate hike cycle. In addition, China's crude oil imports increased to a nearly three-year high in March, and the US government has plans to replenish strategic oil reserves, which will increase oil demand. As of last Thursday, the settlement prices of the main contracts for WTI and Brent crude oil futures were 82.52 US dollars per barrel and 86.31 US dollars per barrel, respectively. The recent fluctuation trend of international oil prices may, to some extent, affect the price level of domestic and foreign LPG markets. Due to trade process reasons, the CIF price of LPG imports in China often lags behind the futures and spot prices in the international market for a period of time. The impact of recent fluctuations in LPG external prices will gradually become apparent in the later CIF price of LPG imports.
In the domestic market, supply has decreased, demand has increased, and the market trading atmosphere remains stable. From a supply side perspective, the actual arrival volume of imported LPG in China last week was 527100 tons, with the arrival cargo resources mainly in the East China region; The domestic gas production mainly comes from local refineries, and the domestic LPG production decreased month on month compared to the previous week; Overall, the total domestic LPG supply during the week decreased compared to the previous week, and the supply side tightened. From the perspective of demand side, the demand for civilian fuel combustion is flat; Industrial demand has increased, specifically in terms of chemical deep processing: in the field of propane deep processing, the operating rate of PDH devices has increased, and the demand for propane chemical industry has increased; In the field of butane deep processing, the MTBE operating rate has increased, the alkylation operating rate has decreased, and the demand for butane chemical industry has remained stable. Overall, the amount of resources arriving at the port last week met expectations; The domestic gas volume has decreased compared to the previous week, and the overall market supply has increased compared to the previous week; The demand for civilian gas remains flat; Industrial demand has increased, propane chemical demand has increased, and butane chemical demand has remained flat. Last week, all products in the domestic liquefied gas industry chain experienced both ups and downs.
The compilation of China's comprehensive import CIF price index for LPG was jointly completed by the Global Trade Monitoring and Analysis Center of the General Administration of Customs and the Shanghai Oil and Gas Trading Center, Based on the first calendar week of 2019 (the comprehensive import CIF price of liquefied propane in China for that week was 3541 yuan/ton, with a price index of 100; the comprehensive import CIF price of liquefied butane in China for that week was 3535 yuan/ton, with a price index of 100), this comprehensively reflects the price level of LPG import CIF in China for the previous week. This is a beneficial exploration for China to establish its own benchmark price for LPG, which is conducive to improving market transparency, providing important reference basis for the marketization of LPG chemicals, facilitating timely and effective integration between the domestic and international markets, and further enhancing China's influence in the international LPG market.
In terms of international pricing benchmarks, according to data released by Saudi Aramco's CP in April 2023; The contract price (CP) of propane in April was $555/ton, a decrease of $165/ton compared to the previous month, a decrease of 22.92% month on month, and a decrease of 40.96% compared to the same period last year; The contract price (CP) of butane in April was 545 US dollars per ton, a decrease of 195 US dollars per ton compared to the previous month, a decrease of 26.35% month on month, and a decrease of 43.23% compared to the same period last year; In April, Saudi Arabia's CP dropped significantly, which may affect the current domestic and international LPG market price level.
In terms of international prices, there is a high positive correlation between the international price of LPG and the price of crude oil. From the perspective of crude oil prices, international oil prices have continued to rise in volatile trading in the past week, forming a continuous four week upward trend. However, as the positive factors of tight supply are gradually digesting, the upward trend of oil prices has slowed down. After the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) oil producing countries announced in early April that they would further reduce production by 1.66 million barrels/day from May, the market's concern about the tightening supply prospect has driven the oil price up by nearly 7% in the first week of this month. This week, the United States announced that the inflation rate in March had slowed down, and the year-on-year growth rate had dropped to a low of nearly two years. The market's risk appetite has improved, and the dollar has subsequently weakened, At the same time, it also made the market speculate that the Federal Reserve is about to end its interest rate hike cycle. In addition, China's crude oil imports increased to a nearly three-year high in March, and the US government has plans to replenish strategic oil reserves, which will increase oil demand. As of last Thursday, the settlement prices of the main contracts for WTI and Brent crude oil futures were 82.52 US dollars per barrel and 86.31 US dollars per barrel, respectively. The recent fluctuation trend of international oil prices may, to some extent, affect the price level of domestic and foreign LPG markets. Due to trade process reasons, the CIF price of LPG imports in China often lags behind the futures and spot prices in the international market for a period of time. The impact of recent fluctuations in LPG external prices will gradually become apparent in the later CIF price of LPG imports.
In the domestic market, supply has decreased, demand has increased, and the market trading atmosphere remains stable. From a supply side perspective, the actual arrival volume of imported LPG in China last week was 527100 tons, with the arrival cargo resources mainly in the East China region; The domestic gas production mainly comes from local refineries, and the domestic LPG production decreased month on month compared to the previous week; Overall, the total domestic LPG supply during the week decreased compared to the previous week, and the supply side tightened. From the perspective of demand side, the demand for civilian fuel combustion is flat; Industrial demand has increased, specifically in terms of chemical deep processing: in the field of propane deep processing, the operating rate of PDH devices has increased, and the demand for propane chemical industry has increased; In the field of butane deep processing, the MTBE operating rate has increased, the alkylation operating rate has decreased, and the demand for butane chemical industry has remained stable. Overall, the amount of resources arriving at the port last week met expectations; The domestic gas volume has decreased compared to the previous week, and the overall market supply has increased compared to the previous week; The demand for civilian gas remains flat; Industrial demand has increased, propane chemical demand has increased, and butane chemical demand has remained flat. Last week, all products in the domestic liquefied gas industry chain experienced both ups and downs.
The compilation of China's comprehensive import CIF price index for LPG was jointly completed by the Global Trade Monitoring and Analysis Center of the General Administration of Customs and the Shanghai Oil and Gas Trading Center, Based on the first calendar week of 2019 (the comprehensive import CIF price of liquefied propane in China for that week was 3541 yuan/ton, with a price index of 100; the comprehensive import CIF price of liquefied butane in China for that week was 3535 yuan/ton, with a price index of 100), this comprehensively reflects the price level of LPG import CIF in China for the previous week. This is a beneficial exploration for China to establish its own benchmark price for LPG, which is conducive to improving market transparency, providing important reference basis for the marketization of LPG chemicals, facilitating timely and effective integration between the domestic and international markets, and further enhancing China's influence in the international LPG market.