According to the commodity market analysis system of Shengyishe, the price of civilian LPG in Shandong province increased sharply in mid to early November, with a slight decline at the end of the month and an overall slight increase. From November 1st to November 26th, the price of civilian LPG in Shandong increased from 5,146 RMB/ton to 5,240 RMB/ton, with a 1.83% increase during the cycle.

In terms of supply, in November, there was little change in the on-site operating rate, and upstream refineries were operating at reduced loads, while supply remained low. The arrival of ships from ports has relatively decreased, and the overall supply of goods in the region remains at a low level. The continuous tightening of supply has provided some positive support for the LPG market, but the support gradually weakens due to weak demand in the later stage.

In terms of demand, entering November, the temperature in the northern region has dropped significantly, effectively boosting the demand for civilian combustion. The profit inversion of the PDH unit in the chemical industry is still severe, with a operating rate of around 60%. The demand for chemical products is weak, and some chemical products have shrunk in profits. Enterprises are reducing their production and procurement.

In terms of futures, the recent weak and volatile LPG futures market has limited improvement in domestic demand due to cooling down and resumption of chemical plant work. Downstream chemical product prices have weakened, driving down market expectations. However, in late November, port arrival volume continued to decrease, and market bottom support may be strengthened. And the import cost support during the peak season still exists, while LPG generally maintains range fluctuations.

Overall, the LPG market has begun to decline at the end of the month, with imported propane arriving at ports in the future. The related product propane market is affected by weak demand, and the price increase is weak, making it difficult to widen the price difference between LPG and propane. The introduction of the CP in December is imminent, and we closely monitor the external market dynamics. We expect the LPG market to operate in a narrow range in the short term.

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