Huatai Futures: The increase in demand for propane feedstock procurement will provide support for LPG prices below.

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With the signing of a memorandum of understanding between the U.S. and Iran, the market expects the Strait of Hormuz to gradually resume normal navigation and for LPG supply in the Middle East to recover. If navigation through the strait returns to normal in the future, and is compounded by incremental U.S. exports, the LPG balance sheet will return to a looser state in the medium term, and LPG prices will face strong downward pressure. However, in the short term, uncertainty remains around the resumption of shipping logistics through the strait and the restart progress of upstream facilities in the Middle East. At the same time, the recent sharp rebound in domestic PDH unit operating rates has increased demand for propane feedstock procurement, which will provide support from below. Recently, both international propane and butane prices and landed costs have also seen a slight rebound, indicating a mismatch between the timing of supply and demand. (Huatai Futures)
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