Propane

Recent Propane Commodity Market Dynamics Intelligence
1. Price Trends
- Domestic Market: In the East China region, the mainstream transaction price of propane is 5,200–5,350 CNY/ton, up approximately 100–150 CNY/ton from the previous week; in the South China region, the mainstream transaction price is 5,300–5,450 CNY/ton, with an increase of 120–180 CNY/ton; in the North China region, prices range from 5,100–5,250 CNY/ton, up 80–130 CNY/ton.
- International Market: Saudi Aramco’s CP price for Month X of 2024 has been released, with propane at 620 USD/ton, up 30 USD/ton from the previous month; butane at 620 USD/ton, up 30 USD/ton from the previous month. Converted to landed cost, propane is approximately 5,200–5,250 CNY/ton.
2. Supply Situation
- Domestic Production: The operating rate of domestic propane producers remains at around 75%–80%, with weekly production approximately 350,000–370,000 tons, showing little change from the previous period. Some refineries have entered routine maintenance periods, but new capacity releases have provided some supplementary supply.
- Import Volume: Customs data show that last month’s propane import volume was approximately 1.8–1.9 million tons, an increase of 50,000–100,000 tons month-on-month. Recent arrivals of vessel cargo have been substantial, leading to an increase in port inventory. Currently, total port inventory in the East and South China regions is 600,000–650,000 tons, at a medium-to-high level.
3. Demand Situation
- Civil Demand: As temperatures gradually decrease, civil combustion demand in northern regions is increasing, with terminal purchasing enthusiasm rising and traders increasing restocking operations.
- Industrial Demand: The operating rate of PDH (Propane Dehydrogenation) units remains at 80%–85%, providing stable demand for propane. Some chemical enterprises are maintaining normal production due to acceptable product margins, ensuring rigid demand for propane.
4. Impact of Related Products
- Liquefied Gas: Propane has strong price linkage with other components of liquefied gas. Recently, the overall trend in the liquefied gas market has been positive, providing some support to the propane market.
- Crude Oil: International crude oil prices are fluctuating in the range of 75–80 USD/barrel, with the cost side having some impact on the propane market. However, the guidance effect of recent crude oil price fluctuations on propane prices has been relatively limited.

Analysis and Judgment
1. Supply Side: Although some domestic refineries are under maintenance, new capacity releases and increased import volumes have made overall propane supply relatively sufficient. Rising port inventory exerts some pressure on market prices. However, increased winter civil demand and stable industrial demand will help absorb the supply increase to some extent.
2. Demand Side: Seasonal growth in civil combustion demand and stable industrial demand are the main supports for current propane demand. As weather becomes colder, civil demand is expected to continue increasing, providing a positive impact on market prices.
3. Cost Side: The increase in international propane CP prices has raised import costs, exerting some cost-push effect on domestic propane market prices. Meanwhile, crude oil price fluctuations indirectly affect market sentiment, but the current impact is relatively limited.

Forecast
1. Short-term (1–2 weeks): Supported by increased winter civil demand and higher international CP prices, propane market prices are expected to continue rising slightly. Mainstream transaction prices in East and South China may rise to 5,350–5,500 CNY/ton, while prices in North China may rise to 5,250–5,400 CNY/ton.
2. Medium-term (1–2 months): As the Spring Festival approaches, downstream enterprises may stock up in advance, potentially further releasing demand. However, high port inventory and stable domestic supply may limit the magnitude of price increases. Prices are expected to fluctuate around current levels with relatively limited upside potential.
3. Long-term (3 months or more): If winter temperatures are lower than the same period in previous years, civil demand will increase significantly, potentially driving further propane price increases. However, if domestic supply continues to rise or import volumes increase substantially, the market supply-demand structure may change, posing a risk of price correction. Close attention should be paid to factors such as domestic production, import volumes, and weather changes that affect the market.