Prices for Liquified Petroleum Gas (LPG) in the Chinese market began to decline further in the month of March 2023. Many problems (namely- Rising Covid cases and weak demand recovery even during post-festive season) have complicated the market environment for the Chinese LPG market since the start of 2023. There was high optimism for LPG during the start of 2023 as the downstream industries started actively restocking products, and the upstream crude oil costs increased along with persistent downstream demand, further enhancing the benefits to the LPG market in China. The market decreased from the high level and rose from the low level during the Spring Festival. The high market level passed without any problems, and downstream demand and transport capacity steadily recovered after the celebration.

Demand-driven downstream purchases were made, and a strong wait-and-see mentality prevailed in February. The price of LPG also decreased significantly due to the month's multiple drops in the price of crude oil, which further undermined market confidence. Late in February 2023, the price adjustment was in place, business operations went well, the market stock was under control, as well as the cost started to increase slightly, and this trend was expected to continue during March.

However, Due to the recent clear deterioration of downstream demand, the price trend of LPG in China started declining. The market felt confident because the manufacturer's inventory was under control. The environment for receiving orders from the downstream was only average, abetting the easing prices of the commodity in the Chinese market.

According to ChemAnalyst, the declining price trend of LPG is not likely to continue, not even for the rest of this month. The downstream demand is highly likely to rise due to the reopening of the Propane Dehydrogenation unit, and the country's inventory levels of LPG are steadily declining.