Price trend

The domestic propane market continued to rise in May. According to the Commodity Analysis System of SunSirs, the average price of propane in Shandong's market was 5,178 RMB/ton on May 1st, and 5,565 RMB/ton on May 28th, with a monthly increase of 7.46%, an increase of 22.3% compared to the same period last year.

Analysis review

There was a significant difference in the propane market between the north and south in May. Taking Shandong as an example, after the May Day holiday, downstream restocking was concentrated, and upstream inventory decreased to a low level. At the same time, downstream PDH units began to operate one after another, with a significant increase in demand, driving up propane prices. Along with price increases, the transaction atmosphere weakened, and shipments were not smooth, resulting in a decline in propane prices in the middle of the month. In late May, PDH production remained at a high level, and with the boost of demand and crude oil, propane prices continued to rise, reaching a high level.

Saudi Aramco announced its CP of May 2024, with propane at 580 US dollars per ton, a decrease of  35 US dollars per ton compared to the previous month; Butane was 585 US dollars per ton, a decrease of \35 US dollars per ton from the previous month. Equivalent cost in onshore US dollars:  615 US dollars/ton for propane and 625 US dollars/ton for butane.

Market outlook

Overall, with the upcoming release of CP in June, the enthusiasm for downstream entry into the market has weakened, and the wait-and-see atmosphere has become stronger. However, with low upstream inventory and stable demand, it is expected that the propane market will operate at a high level in the short term.

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