Huatai Futures: Liquefied Petroleum Gas Futures Surge Continuously, LPG Basis Weakens

MaticHoleFiller · 2026-03-25T14:06:02+00:00

The article analyzes LPG prices across different regions in China and points out that due to tense geopolitical situations in the Middle East, LPG supply has been significantly tightened, leading to a continuous increase in onshore prices. Although exports from the United States have increased, they still cannot fully compensate for the shortfall in the Middle East. In a market characterized by high volatility, caution is advised, and it is recommended to adopt a wait-and-see approach in the short term.

MaticHoleFiller

2026-03-25 14:06:02

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Source: Huatai Futures

Author: Kang Yuanning

Market Analysis

Regional Prices on March 23: Shandong Market: 6,500–6,600; Northeast Market: 5,520–6,010; North China Market: 6,150–6,550; East China Market: 6,580–7,090; Yangtze River Delta Market: 6,650–6,860; Northwest Market: 5,900–6,000; South China Market: 6,950–7,130. Data source: Zhuochuang Information
In the second half of April 2026, China East China delivered cargo prices: Propane: $1,158/ton, down $1/ton; Butane: $1,158/ton, down $1/ton; Converted to RMB: Propane: 8,802 RMB/ton, up 11 RMB/ton; Butane: 8,802 RMB/ton, up 11 RMB/ton. (Data source: Zhuochuang Information)
In the second half of April 2026, China South China delivered cargo prices: Propane: $1,158/ton, down $1/ton; Butane: $1,158/ton, down $1/ton; Converted to RMB: Propane: 8,802 RMB/ton, up 11 RMB/ton; Butane: 8,802 RMB/ton, up 11 RMB/ton. (Data source: Zhuochuang Information)

Currently, geopolitical tensions remain high, with the Strait of Hormuz throughput of oil tankers (including LPG ships) at very low levels, and Middle Eastern LPG supplies significantly tightening. Additionally, both sides in the conflict have increased attacks on energy infrastructure; last week, Iran’s largest gas field, South Pars, was attacked, causing some facilities to shut down, directly impacting local LPG production. The war’s effects are gradually extending from the Strait disruptions to reductions at the source oil and gas fields, lengthening the potential duration. Although increased US LPG exports can partly offset Middle Eastern shortages, export terminal capacity limits (about 7.2 million tons) restrict full compensation. Moreover, due to force majeure at some terminals, actual US shipments are below expectations, further tightening the Asian LPG market, with onshore prices continuing to rise. The previously lagging Propane (PG) market has also accelerated upward. Considering the supply gap and the reduction in inventory cancellations at the end of March easing market pressure, PG is expected to remain strong. However, the Middle East situation remains uncertain, and market sentiment is highly volatile. After a significant price surge, downstream demand may show negative feedback, causing the basis to decline sharply. Yesterday, comments from Trump about delaying strikes on Iran were seen as a calming signal, and PG night trading followed crude oil prices downward. The Iran situation remains unpredictable, with news flow fluctuating, and in this high-volatility environment, both longs and shorts lack safety margins, requiring caution.

Strategy

Unilateral: Short-term oscillation with a slight upward bias, mainly watchful

Calendar Spreads: None

Cross-Commodity: None

Futures and Spot: None

Options: None

Risks

Oil price fluctuations, macro policies, tariff policies, port shipping delays, refinery maintenance exceeding expectations, etc.

Investment Consulting Business Qualification: Securities Permit [2011] No. 1289

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