Macro Risks Remain, Waiting for Demand Recovery

Huatai Futures Liquefied Petroleum Gas Daily Report On 17th March 2023: Macro Risks Remain, Waiting for Demand Recovery.

On March 15, the CFR (cost and freight) prices for propane and butane for delivery to East China during the first half of April 2023 were $580/ton. Converted to RMB, the propane and butane delivery costs were RMB 4385/ton.

On March 15, the CFR (cost and freight) prices for propane and butane for delivery to South China during the first half of April 2023 were $588/ton. Converted to RMB, the propane and butane delivery costs were RMB 4446/ton.

"US Energy Security Envoy Hochstein: Biden Committed to Supplementing Oil Reserves. The government hopes to supplement oil reserves in a responsible manner."

According to Saudi state media, the United States, Saudi Arabia, and Russia have reiterated their commitment to the OPEC+ production cut agreement.

Market Analysis:

Recently, macroeconomic factors have dominated the price movements of petroleum-related commodities. Due to the sudden increase in risks in the overseas banking system, investors have been avoiding risky assets such as oil, which has caused crude oil prices to plummet. LPG prices have also been impacted and both domestic and international prices have continued to fall. After the Swiss National Bank announced its support for Swiss credit liquidity, panic subsided slightly and oil prices showed signs of stabilizing and rebounding during night trading yesterday. However, macroeconomic risks have not completely disappeared, and the market remains volatile, so caution is advised. In terms of LPG's own fundamentals, it is currently in a stage of bottoming out and waiting for new supporting factors to materialize. Although there are no major contradictions, the short-term macroeconomic disturbances are too significant, so it is recommended to adopt a wait-and-see approach and wait for the macro environment and oil price trends to stabilize.