kinbingo| LPG market: Crude oil prices rebound and basis strengthen, short-term prices may rebound against small ones

Newsletter summary

LPG market may meet a small rebound in the short termKinbingoAffected by the rebound of crude oil and strong base spread, but the demand for chemical industry is weak. FEI price converted into PDH profit slightly repair, domestic PDH operating rate increased month-on-month. PG2406 is expected to fluctuate in a range of 4520-4770.

Text of news flash

[short-term fluctuations in the LPG market may welcome a small rebound]

The lower limit of price fluctuation in LPG market is close, and there is a possibility of a small rebound in the short term.

According to recent market developments, the FEI price in May has been adjusted to US $598 per tonne, while the Saudi CP price in April was US $615 per tonne, equivalent to RMB landing cost of about 5051 yuan per tonne, and the import cost is at a high level. At the same time, PDH profits converted by FEI rebounded slightly.

In terms of transport costs, the freight charges from the Middle East to the far East and from the United States Bay to the far East (Panama) are adjusted to US $64 / tonne and US $125 / tonne respectively. The domestic PDH operating rate rose to 59% on April 19.Kinbingo.8%, an increase of 5.1% over the previous month. Spot prices rose, Ningbo and Shandong civil gas prices reached 5200 yuan / ton and 5100 yuan / ton respectively, the basis continued to strengthen. Market pressure eased, and the number of warehouse receipts increased to 1781, an increase of 521.

South China Futures point out that the LPG market is affected by crude oil prices, PDH chemical demand and Shandong civil gas spot. Despite the recent weakness in chemical demand, the continued rise in spot prices of civil gas and the strengthening of the basis are expected to have a positive impact on the market. The rebound in the $85 support level of Brent crude continues.

In the game of rebound in oil prices, strong basis and weak chemical demand, the LPG market is expected to continue to fluctuate. The price range of the PG2406 contract is expected to be 4520-4770 yuan / ton. In view of the fact that the current price is close to the bottom of the volatility range, the market may rebound slightly in the short term. In terms of strategy, investors are advised to maintain a wait-and-see attitude.