Remarks: The daily prices in the above table are the weekly closing prices on Thursday. W-O-W change calculations are based on weekly average prices. Civ is short for civil-use, C4R2 is short for C4 raffinate II.

2. Market Review

Up to September 21, China’s weekly LPG prices averaged RMB 5,595/mt, up RMB 51/mt or 0.92% week on week.

China’s LPG prices rose at first and then went down within a narrow range. At the beginning of this week, the relatively high international LPG prices gave support to China’s LPG market, and downstream users replenished stocks. Accordingly, China’s civil-use gas prices rose somewhat. With civil-use gas prices reaching high levels, more downstream users adopted wait-and-see attitudes to the LPG market, resulting in the inventory increment at producers. Accordingly, China’s civil-use gas prices were curtailed. Moreover, the international crude oil prices increased at first and then dwindled, influencing China’s C4R2 prices. With the approach of the Mid-Autumn Festival and the National Day holidays, sellers intended to sell goods preferentially and adopted cautious attitudes to the market.

3. Market Forecast

International crude oil: Next week, it is predicted that the international crude oil prices will probably fluctuate downward, and the WTI crude oil prices may average $88/bbl. It is expected that the Fed may raise the interest rate, weighing on the international crude oil market. The crude oil production cut and relatively low U.S. crude oil stock are likely to notably support the international crude oil prices. Given the macro pressure and support from fundamentals, it is predicted that the international crude oil prices will probably fluctuate downward.

Supply: Sales at PetroChina Daqing Refining & Petrochemical and Daqing Hongwei Qinghua Petrochemical will probably recover, and some units in Shandong are likely to be restarted, lifting China’s LPG commercial volume. Other units will probably run steadily. Therefore, China’s LPG commercial volume may rise slightly.

Demand: As for the civil-use gas market, the overall end demand is fairish with temperature declining. With the approach of the Mid-Autumn Festival and the National Day holidays, downstream users may replenish stocks, lifting the demand for civil-use gas. As for the feedstock gas market, the operating rate of the alkane deep-processing industry remains low, but it is estimated that alkylation unit operating rates may rise next week, so the demand for feedstock gas may improve marginally.

Market sentiment: The demand for LPG is likely to become favorable with the temperature decline, so most market participants may adopt bullish attitudes to China’s LPG market. However, the international crude oil prices may fluctuate downward, giving thin support to China’s LPG market.