In 2021, the LPG trend will fluctuate greatly, with obvious upward and downward trends. It can be divided into five stages. The cold wave is not as cold as expected from mid-January to the end of January. LPG futures prices fell rapidly from 4000 to around 3300; from early February to the end of February, based on the rising demand for corporate replenishment after the Spring Festival, the price of LPG futures rose again from 3300 to around 4000; from early March to the end of April, the off-season for civilian demand came, Spot prices continued to fall, but PDH maintained high profits, and the demand for propane chemicals was strong. LPG futures prices fluctuated slightly and fell to around 3650; from early May to mid-October, the market began trading June and subsequent months futures contracts, and June was roughly The relative low point of the off-season price during the year, the trading logic turned into a gradual shift from off-season to peak season, and futures prices bottomed out and continued to rise; at the same time, PDH continued to maintain high profits and strong demand for propane chemicals further boosted the price to 6800; mid-to-late October After that, the price continued to fall sharply, and has now fallen to around 4000. In mid-to-late October, the market began trading December and subsequent months of futures contracts, and December was roughly the year's high of spot prices, and the focus of market trading began to shift to off-season demand; at the same time, PDH profits quickly turned negative, and the duration has not been seen in history, The market expects a major change, and the future PDH plant operating rate and propane demand begin to appear major uncertainties. LPG futures prices showed a downward trend. In the process of price peaking, in addition to fundamental factors, volatility signals were also seen. In mid-September, LPG futures prices continued to rise with volatility, which meant that the market’s long sentiment gradually shifted from stability to excitement. Subsequently, LPG futures prices fell all the way and the volatility remained high, indicating that market panic was spreading.
Market outlook for 2022:
In 2021, LPG has walked out of a complete cycle of off-season and peak seasons. At the end of April, market transactions in June off-season contract prices bottomed out, and December contract prices peaked in mid-to-late October. The period from off-season to peak season is exactly half a year. In the first three quarters, PDH maintained a positive profit, which became the key to further strengthening LPG. After entering mid-to-late October, PDH profits quickly turned negative, with a rare history of duration, market expectations were severely impacted, and prices quickly peaked and fell. Looking ahead to 2022, LPG futures prices will continue to cycle in the off-peak season, that is, there is a high probability that the price will bottom out in May and the price will peak in October. But there is a significant difference from 2021: the expected price decline and duration under the off-season will exceed 2021, and the expected price increase and duration under the peak season will be less than 2021. There are two reasons: one is the location and trend of crude oil prices. The current oil prices are in a downward trend, and the pressure on LPG valuations is increasing; the second is that the scenario of PDH's continued high profits in 2021 and before is likely to be difficult to appear, and it will be large in 2022. The probability of maintaining low profits, the market's expectation of PDH equipment overhaul or production shutdown has increased, and the important increase in LPG chemical demand is facing challenges. Therefore, the high probability of LPG in 2022 is low before and high afterwards, and the price decline and duration may exceed expectations, and a weak rebound will follow in May.