Trade Resources Industry Views LPG Prices in South China Surged Yuan 300-600/Mt as Supply Fell and Demand Increased

LPG Prices in South China Surged Yuan 300-600/Mt as Supply Fell and Demand Increased

LPG prices in South China surged Yuan 300-600/mt ($49-98/mt) this week as supply fell and demand increased, domestic traders said Friday.

Imported LPG, with a propane and butane ratio of 80:20, was heard traded in the range of Yuan 6,750-6,850/mt in southern China's Pearl River Delta region Thursday, up around Yuan 300/mt from Yuan 6,450-6,550/mt seen the week before, local traders said.

"The supply of imported LPG has been mainly propane or propane-rich cargoes in the market recently. The price of butane will be around Yuan 50/mt higher than that of propane now," one local trader said.

Domestically produced LPG was heard traded at around Yuan 6,700/mt in South China Thursday, up Yuan 600/mt from the week before, local traders said.

"Less supply from Sinopec Hainan refinery and improving demand from end users has encouraged buyers, mainly LPG distributors, to buy more cargoes this week, which inevitably pushed up LPG spot prices," another local trader said.

Sinopec Hainan refinery, which usually sends 4-5 LPG barges, each 1,000-1,500 mt, to the Pearl River Delta every week, was said have reduced supply to the region this week.

"Sinopec Hainan refinery was said to have sold its LPG production to local petrochemical plants in Hainan this week, so it caused a supply shortage in the Pearl River Delta," the second trader said.

In addition, more factories in the region have resumed operations this week after the recent Lunar New Year and Lantern Festival holidays, which further increased demand for LPG, traders added.

However, the strong buying interest that emerged early in the week cooled a little Thursday as LPG distributors built up inventories and global LPG prices softened, traders said Friday.

NYMEX March crude fell 39 cents/barrel to settle at $102.92/barrel Thursday on a build in US inventories and disappointing manufacturing data from China and Europe. Lower crude prices are expected to exert downward pressure on global LPG prices, traders added. PRICES FIRM IN EAST CHINA

LPG prices in East China's Yangtze River Delta edged up this week amid stable fundamentals, traders in the region said Friday.

Spot prices of imported LPG truck cargoes were said to have traded in the range of Yuan 6,650-6,700/mt in the Delta this week, up around Yuan 25/mt from Yuan 6,600-6,700/mt last week, local traders said.

Domestically produced LPG traded at around Yuan 6,550-6,650/mt in the region late week, up around Yuan 100/mt from last week, traders added.

"Supply and demand fundamentals are broadly stable in the region this week... local refineries have no inventory pressure, while demand from end users has not seen much increase," one local trader said.

"LPG prices in the region are expected to remain stable next week unless the balance in supply and demand fundamentals changes," the trader added.

Sinopec's Jinling and Zhenhai refineries in eastern China's Jiangsu and Zhejiang provinces are both due to shut fluid catalytic cracking units for maintenance next week, local traders said. Further details were not immediately available.

Source: http://news.chemnet.com/Chemical-News/detail-2254916.html
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South China LPG Prices Surge This Week on Falling Supply, Rising Demand
Topics: Metallurgy