1. Crude oil price: Most of the domestic liquefied petroleum gas is the by-product gas of the refinery, and its yield is 2%-5% of the crude oil input. Therefore, fluctuations in crude oil prices have a direct impact on LPG prices. Observing the data from April 2012 to April 2020, the correlation between domestic liquefied petroleum gas price changes and crude oil price changes reached +53%.
2. Global supply: Since 2016, the global supply of liquefied petroleum gas has exceeded demand, and the trade model has changed from demand-driven to supply-driven. In particular, the United States has achieved “overtaking on a curve” through the shale gas revolution, and has evolved from an importer of liquefied petroleum gas to an exporter of liquefied petroleum gas, which has had a significant and far-reaching impact on the pricing system of international trade in liquefied petroleum gas.
3. Import situation: The southeast coast is the main consumption area of liquefied petroleum gas in my country, and the import volume of liquefied petroleum gas in these areas is much higher than that of other domestic regions. Excessive reliance on imports is an important reason for the linkage between the price of liquefied petroleum gas in the region and the international market. The prices of imported propane and imported butane are closely related to domestic LPG prices.
4. Alternative energy: It is generally believed that liquefied petroleum gas and liquefied natural gas are interdependent and complementary. The direct competition between liquefied petroleum gas (LPG) and alternative energy liquefied natural gas (LNG) is mainly reflected in industrial users, and liquefied petroleum gas, which is also used as fuel, has a close substitution relationship with liquefied natural gas.
