China's liquefied gas market will rise again after the Spring Festival

"According to estimates, after the Spring Festival, China's liquefied gas market will rise again to a high position. It is recommended that the tertiary liquefied gas station purchase at bargain prices before the Spring Festival to raise the inventory to a mid-to-high level." January 20, Jinlian Chuang LPG analyst Wang Ning said.

Wang Ning introduced that in 2021, China’s northeast liquefied gas market has ushered in a “good start”. In addition to the favorable factors of tight resource supply in the northeast, CP propane soared by US$100/ton in January, and the cost of imports rose nearly. Thousands of CNY/ton support, the market took advantage of the momentum to rise all the way, the mainstream of civil liquefied gas once rose to 3950-4250 CNY/ton, and maintained a high and firm trend in the first half of January. However, the “highlight” is not long. The Northeast LPG market has There are signs of decline.

According to Wang Ning’s analysis, in the second half of January, there is room for downward adjustments in the LPG market in Northeast China. On the one hand, the downstream purchasing atmosphere for high-priced resources is general, and as the new year is approaching, most of the main business units have pooling actions, so the downstream has a wait-and-see attitude towards the later market. On the other hand, since the three northeastern provinces have cases of new crown pneumonia infection, the epidemic prevention and control situation is severe, and the vehicles receiving the cargo in the refinery require nucleic acid testing and only have a 3-day validity period. The willingness of transporters to receive the cargo decreases and the refinery's shipment is poor. Inventories are gradually rising.

Considering the Lunar New Year in mid-February, before that, refineries still have price cuts to stimulate shipments. However, considering the high support of import costs, the market decline may be controlled within 300-400 CNY/ton. After the return of the Spring Festival holiday, as the downstream round of centralized replenishment starts, it is expected that CP propane will continue to rise by US$50-60/ton in February. "It is understood that the output of Saudi LPG in February is expected to decline. Considering that my country's domestic Spring Festival atmosphere is strong and importers intend to reduce the volume, China's import volume will drop significantly." Wang Ning said.