1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - In the short - term, due to the temporary supply - demand mismatch, the LPG market shows a tight fundamental situation and is oscillating strongly. However, in the medium - term, the supply elasticity of LPG is greater than the demand elasticity. Without large - scale supply disruptions, the supply will be abundant. The supply from the US and the Middle East is expected to grow, while the demand growth in Asia - Pacific countries is restricted by the weak profit of downstream devices. Overall, the global LPG market may continue the oversupply pattern in 2026, but geopolitical conflicts and weather may cause temporary supply - demand mismatches [6][127]. - Based on the decline of the oil price center and the expected oversupply of global LPG, there will be resistance to the upward movement of LPG prices in 2026. After the short - term strong oscillation caused by supply - demand mismatch, opportunities for shorting on rallies can be considered, and the registration of new warehouse receipts after the price rebound on the futures market should be monitored. Recently, the strong cracking spread of naphtha has made LPG more cost - effective, driving the substitution demand of some cracking devices. But if the Russia - Ukraine situation eases and sanctions are relaxed, the supply of Russian naphtha may increase, which could suppress the naphtha cracking spread and have an indirect negative impact on LPG valuation [7][128]. 3. Summary According to the Catalog 3.1 Supply - demand Imbalance in the Oil Market and Resistance to Oil Prices - In 2025, international oil prices were in a wide - range oscillating and declining trend. Taking Brent as a reference, the price center has moved down compared to last year. As of November 25, 2025, the average price of the Brent futures main contract was $68.87 per barrel, a 13.76% decrease from the average price in 2024 [14]. - In 2026, the oil market is expected to face downward pressure. The growth elasticity of oil demand has significantly decreased and cannot offset the release of surplus supply capacity. China's oil demand growth has slowed down, and the global oil consumption has entered a stage of low - growth. Although the supply growth rate will slow down next year, it is still expected to exceed demand, leading to an increase in global oil inventories [15]. 3.2 Weak Oscillation in the 2025 LPG Market and Tariff Disturbances - In 2025, the LPG market was in a weak oscillating pattern. The price center moved down due to the decline in oil prices. The Sino - US tariff conflict caused additional disturbances, mainly resulting in regional price differences rather than global trends [29]. - In Q1 2025, the LPG market was oscillating. Although there were some disturbances such as Middle - East device maintenance and US shipping delays, the impact was limited. The downstream demand in the Asia - Pacific region was weak, and there was no obvious supply shortage [29]. - In Q2 2025, the Sino - US tariff conflict led to a significant change in the trade pattern. China reduced its procurement from the US and turned to the Middle East. The supply - demand imbalance between the US and non - US sources supported the CP price and caused the FEI price to drop. After the tariff was reduced, the domestic market still had a wait - and - see attitude. The Middle - East geopolitical conflict in June also had a short - term impact on the LPG market [30]. - In Q3 2025, the LPG market was relatively stable, and the supply - demand imbalance continued [31]. - In Q4 2025, the Sino - US tariff issue resurfaced, but the impact on the market was smaller than in April. The supply in the Middle East decreased due to refinery maintenance, and the demand in India and Southeast Asia increased during the peak season, which supported the LPG price. However, the weak profit of domestic downstream chemical industries limited the upward movement of the domestic market [32]. 3.3 Continued Oversupply of Global LPG in 2026 and the Reshaping of Trade Flows 3.3.1 Growth in Middle - East LPG Supply - OPEC has gradually withdrawn from the production - cut agreement, and the LPG supply in the Middle East is expected to grow. Although the actual production increase may be different from the quota increase, the overall trend is upward. The UAE is promoting natural - gas field development projects, which will contribute to the growth of NGL supply. In 2026, the LPG supply in the Middle East is expected to increase year - on - year [47]. - In the short - term, the supply in Saudi Arabia and Kuwait has tightened due to refinery maintenance, but it is expected to return to the growth track after the maintenance is completed. Saudi Arabia will face more competition from the US, which may suppress the CP pricing in the medium - term. The US sanctions on Iran have increased, but the LPG supply in Iran has not been significantly affected [48][49]. 3.3.2 Growth in US LPG Supply - The production of NGL and LPG in the US has continued to grow in recent years. In 2025, the LPG export volume increased, and the export capacity has been improved through terminal expansion projects. Although there was a potential device failure in December 2025, it is not expected to affect the long - term supply trend [66]. - In 2026, the growth trend of US shale - gas production is expected to continue, and the production of NGL and LPG is also expected to increase. The expansion of export terminals will further enhance the export capacity [67]. 3.3.3 Reshaping of LPG Trade Flows - After the Sino - US tariff conflict in April 2025, China reduced its imports from the US and increased imports from the Middle East. Asian countries such as Japan, South Korea, and India increased their imports from the US. India signed a long - term LPG procurement agreement with the US, which will affect the CP and FEI pricing [85][86]. 3.3.4 Increase in Russian LPG Supply to China - In recent years, China's imports of LPG from Russia have been increasing. From January to November 2025, the import volume exceeded 700,000 tons, a 63.8% increase compared to the previous year. Although the absolute volume is limited by transportation bottlenecks, it has become an important marginal increment, especially for the Northeast region [102]. 3.3.5 Constraints on the Growth of China's LPG Demand - China's LPG demand has been growing, mainly driven by the commissioning of downstream chemical devices (mainly PDH). In 2026, about 3.75 million tons/year of propane dehydrogenation capacity is planned to be put into operation, which may contribute about 2.8 million tons of propane demand. However, the weak profit of the PDH industry has restricted the start - up of existing devices and the commissioning of new ones, so the actual demand growth may be lower than expected [105]. - Other devices such as ethylene - cracking also have potential for growth, but the low profit restricts the endogenous demand growth. The demand for LPG in the combustion sector lacks growth potential, and the demand growth in 2026 will still be mainly driven by the chemical downstream, with profit being the main limiting factor [107].