Propane

Propane Market Dynamics Report (Recent Commodity Market Intelligence)

I. Price Trends
1. National Average Price: As of June 9, 2026, the national average propane price for the first half of 2026 stood at RMB 5,983 per ton, representing a 29.22% increase quarter-on-quarter and a 16.58% increase year-on-year. Prices have recently declined slightly but remain relatively high overall.
2. Regional Prices:
- East China Region: RMB 5,550 per ton on July 17; increased to RMB 6,083 per ton on July 24—a rise of 9.60%.
- Central China Region: RMB 5,826 per ton on July 17; increased to RMB 6,401 per ton on July 24—a rise of 9.87%.
- North China Region: RMB 5,520 per ton on July 17; increased to RMB 6,280 per ton on July 24—marking a significant increase.
- National Quotation (as of July 27): Propane (purity ≥95%) priced at RMB 5,942 per ton.
3. Import Prices:
- For the period June 29–July 5, China’s comprehensive import landed price index for liquefied propane stood at 142.93 points—a 9.18% decline week-on-week and a 15.96% increase year-on-year.
- Saudi CP prices for July showed propane at USD 580 per ton, down USD 180 per ton from June, translating to an estimated landed cost in China of approximately RMB 4,858 per ton.

II. Supply and Demand
1. Supply Situation:
- Domestic Supply: In June, domestic LPG output decreased by 6.88% week-on-week; however, overall supply rose, primarily driven by increased imports.
- Import Volume: China imported 1.7469 million tons of liquefied propane in June—a 1.9% decrease month-on-month—but the average import price reached USD 840.61 per ton, providing strong cost support.
- Import Arrivals: In early July, actual LPG import arrivals in China totaled 0.508 million tons—a 135.19% increase week-on-week, concentrated mainly in Shandong Province.
2. Demand Situation:
- Civil Use Demand: With rising temperatures, civil combustion demand has entered its off-season; consumption is slowing, and procurement focuses predominantly on lower-priced resources.
- Chemical Demand: Demand from propane deep-processing sectors remains relatively stable. However, downstream propylene prices are lackluster, PDH (propane dehydrogenation) plant operating rates are low, and sustained operational losses are dampening enthusiasm for purchasing high-cost feedstock.

III. Key Influencing Factors
1. Geopolitical Situation: Easing geopolitical tensions in the Middle East have significantly impacted the propane market. The resumption of smooth shipping through the Strait of Hormuz has fully eliminated prior geopolitical premiums, triggering a sharp decline in international propane prices.
2. International Crude Oil: Global oil prices initially fell then rebounded. Amid easing Strait of Hormuz shipping conditions, potential OPEC+ production increases, and weak demand-side fundamentals, crude oil prices hit a four-month low.
3. Import Cost: The sharp drop in July Saudi CP prices has substantially reduced propane import costs, exerting downward pressure on domestic and international LPG price levels.

IV. Analysis & Outlook
1. Short-Term Trend: Affected by eased geopolitical tensions, stabilized crude oil price volatility, and declining import costs, propane prices are expected to continue trending weakly with mild fluctuations in the near term.
2. Medium-Term Trend: As temperatures persistently rise, civil combustion demand will further weaken. Although chemical demand offers modest support, it is insufficient to reverse the overall supply-demand balance. Prices are anticipated to stabilize with a slight downward bias during August–September.
3. Long-Term Outlook: Starting in October, falling temperatures and rising combustion demand may drive modest price rebounds. From November to December, colder weather will usher in peak combustion season, and chemical plant operating rates are also expected to improve—suggesting upward price momentum.

V. Price Forecast
1. Price Range: Based on expectations of moderated geopolitical risks and narrowing crude oil price volatility, propane prices in H2 2026 are projected to trend weakly with mild fluctuations, with the average price level likely lower than that of H1. The price range is expected to be RMB 5,600–7,000 per ton.
2. Key Timing Milestones:
- Late June to July: Prices fluctuate weakly, with transaction centers shifting downward.
- August–September: Prices stabilize with a slight downward bias, as market dynamics revert to fundamental supply-demand drivers.
- October: Prices rebound modestly amid rising combustion demand.
- November–December: Prices trend upward as combustion demand enters peak season.