The upward drive of the market weakened due to the oil price correction

The upward drive of the market weakened due to the oil price correction

On 1th February, in the first half of March 2023, the CIF price of frozen goods in East China was $799.00 dollars/ton for propane and $799.00 dollars/ton for butane. 
The arrival cost of propane is 5937.00 RMB/ton, and that of butane is 5937.00 RMB/ton.

Market analysis
Although the LPG market has a strong short-term sentiment due to a certain degree of supply and demand mismatch. But at present, the upward drive has begun to weaken after the price rebounded sharply from the bottom. On the one hand, the crude oil price has been continuously callback recently, which has caused certain disturbance to the downstream LPG market. On the other hand, the recent sharp rise in the cost of propane feedstock may cause negative feedback from the demand side. In fact, the PDH unit has started to decline. In the medium term, the overall supply of LPG is still relatively abundant. Therefore, in the context of the huge increase in the PG futures price, the upward resistance began to increase, and those who did not enter the market should not follow the trend. In the early stage, bulls could consider gradually choosing the opportunity to leave the market.

Strategy
More neutral in the short term, not suitable to catch up; In the early stage, multiple optional machines will leave the site gradually.

Risk
The price of crude oil fell sharply; LPG exports from the Middle East and North America exceeded expectations; Domestic refinery output exceeded expectations; Combustion consumption is less than expected; The load of PDH device dropped sharply.