China's LPG import volume may remain high
04 June 2023
China's LPG import volume may remain high
In the first half of July 2023, the CIF price of frozen goods in East China was 487 US dollars per ton for propane and 477 US dollars per ton for butane. The cost of propane arrival in RMB is 3797 yuan/ton, while the cost of butane arrival is 3719 yuan/ton.
In the first half of July 2023, the landed price of frozen goods in South China was 502 US dollars per ton for propane and 492 US dollars per ton for butane. The cost of propane delivery in RMB is 3922 yuan/ton, while the cost of butane delivery is 3844 yuan/ton.
EIA report: Domestic crude oil production in the United States decreased by 100000 barrels to 12.2 million barrels per day during the week of May 26th. On May 26th, the US Strategic Petroleum Reserve (SPR) inventory decreased by 2.518 million barrels to 355.4 million barrels, a decrease of 0.7%.
According to OPEC+sources, OPEC and its allies are unlikely to announce further production cuts at the June 4th meeting.
Market Analysis
Currently, the fundamentals of LPG remain weak, and the overall supply is relatively loose. From the international market perspective, exports from the Middle East and North America remain relatively high, especially with shipments from the Middle East showing a monthly upward trend. In the environment of abundant overseas supply, China's arrival volume at ports has continued to rise in recent months, reaching a high point in May. Although with the decline in domestic prices, the arbitrage space may narrow, and there may be a marginal decline in import volume. However, it is expected that the level in June will still be relatively high. Based on current shipping schedule data, China's LPG arrival volume in June is expected to be 2.25 million tons, a decrease of 780000 tons compared to May. However, from the high-frequency data at the beginning of the month, it can be seen that the decline in Hong Kong volume is not significant, so this data may continue to be revised up in the future. Overall, the current contradiction in the LPG market lies in the high supply volume, while the demand side performs weakly except for downstream alkane deep processing such as PDH. Excluding crude oil and macroeconomic factors, it is expected that the PG market will continue to experience a weak and volatile pattern.
In the first half of July 2023, the CIF price of frozen goods in East China was 487 US dollars per ton for propane and 477 US dollars per ton for butane. The cost of propane arrival in RMB is 3797 yuan/ton, while the cost of butane arrival is 3719 yuan/ton.
In the first half of July 2023, the landed price of frozen goods in South China was 502 US dollars per ton for propane and 492 US dollars per ton for butane. The cost of propane delivery in RMB is 3922 yuan/ton, while the cost of butane delivery is 3844 yuan/ton.
EIA report: Domestic crude oil production in the United States decreased by 100000 barrels to 12.2 million barrels per day during the week of May 26th. On May 26th, the US Strategic Petroleum Reserve (SPR) inventory decreased by 2.518 million barrels to 355.4 million barrels, a decrease of 0.7%.
According to OPEC+sources, OPEC and its allies are unlikely to announce further production cuts at the June 4th meeting.
Market Analysis
Currently, the fundamentals of LPG remain weak, and the overall supply is relatively loose. From the international market perspective, exports from the Middle East and North America remain relatively high, especially with shipments from the Middle East showing a monthly upward trend. In the environment of abundant overseas supply, China's arrival volume at ports has continued to rise in recent months, reaching a high point in May. Although with the decline in domestic prices, the arbitrage space may narrow, and there may be a marginal decline in import volume. However, it is expected that the level in June will still be relatively high. Based on current shipping schedule data, China's LPG arrival volume in June is expected to be 2.25 million tons, a decrease of 780000 tons compared to May. However, from the high-frequency data at the beginning of the month, it can be seen that the decline in Hong Kong volume is not significant, so this data may continue to be revised up in the future. Overall, the current contradiction in the LPG market lies in the high supply volume, while the demand side performs weakly except for downstream alkane deep processing such as PDH. Excluding crude oil and macroeconomic factors, it is expected that the PG market will continue to experience a weak and volatile pattern.