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LPG Insufficient upward drive, market maintains weak operation

Huatai Futures Liquefied Petroleum Gas Daily: Insufficient upward drive, market maintains weak operation

On May 22nd, in the second half of June 2023, the CIF price of frozen goods in East China was 523 US dollars per ton for propane and 518 US dollars per ton for butane. The cost of propane delivery in RMB is 4039 yuan/ton, while the cost of butane delivery is 4001 yuan/ton.

On May 22nd, in the second half of June 2023, the CIF price of frozen goods in South China was 531 US dollars per ton for propane and 526 US dollars per ton for butane. The cost of propane delivery in RMB is 4101 yuan/ton, while the cost of butane delivery is 4063 yuan/ton.

According to a statement from the Kremlin, Russian President Putin has ordered the government to fine-tune existing indicators and establish new ones to calculate oil prices for tax purposes, in order to reduce discounts on global crude oil prices. The deadline set by the government for this is June 30th. Last month, the Deputy Finance Minister of Russia stated that Russia may consider further narrowing the discounts in its tax formula.

OPEC Secretary General: The oil and gas industry needs to speak up unanimously on the harmful reality of underinvestment. Insufficient investment in the industry may lead to market fluctuations and endanger growth.

Market Analysis:
Recently, the LPG market has maintained a weak and volatile situation. On the one hand, the price of crude oil is affected by macroeconomic sentiment, making it difficult to form an effective breakthrough. Yesterday, it fell again and drove the momentum of commodity retreat; On the other hand, the fundamentals of LPG itself are relatively weak, and currently, in addition to the improvement of PDH demand, there is a lack of positive factors driving it. As the demand for combustion in the northern hemisphere enters the off-season, the Middle East and North America maintain high supply, and the external market is weak. Currently, CP and FEI swap prices are around 480 and 510 US dollars per ton, respectively. In addition, due to tax and fee policy adjustments, the recent significant decline in the price of post ether C4 also poses a potential drag on PG's market pricing. Overall, there are many resistance factors in the current LPG market, and it is difficult to rebound significantly before the emergence of new catalytic factors.


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