Report Industry Investment Rating - Not provided in the report Core Views - In Q4, both domestic and overseas supply of LPG remains resilient, while the demand side faces greater challenges [1] - The price range for Q4 is estimated to be between 3,800 - 4,600 yuan/ton [2] - Recommended strategies include range - trading for single - side operations, selling near - term contracts and buying far - term contracts at high prices for monthly spreads, and buying overseas and shorting domestic at low prices for the domestic - overseas spread [3] Summary by Relevant Catalogs Chapter 2: Market Review - In Q3, the domestic LPG price showed a pattern of first falling and then rising, affected by the crude oil market and a large number of warehouse receipts. The main contract price dropped from 4,500 yuan/ton to 3,770 yuan/ton, and the overseas CP contract price dropped from $600/ton in June to $520/ton in September [4][5] - From April to September this year, the domestic PG warehouse receipt volume was continuously at a seasonal high. Near - month prices were suppressed, the basis was mostly at a seasonal high, and the monthly spread was in a contango pattern, with the 9 - 10 spread reaching a minimum of about - 720 yuan/ton [8] - In Q3, the overseas price relationship was CP>FEI>MB. The MB price was relatively weak, the CP - FEI spread narrowed, and the FEI - MB spread widened [9] Chapter 3: Core Focus Points 3.1 Supply Still Has Resilience - **Middle East**: OPEC+ has been gradually increasing production since May, but the export increment is not obvious. From January to August, the total LPG export was 32,252 tons, with a year - on - year increase of 1.60%. It is expected that the monthly average export volume in Q4 will be around 3,800 - 3,900 KT, similar to that of last year's Q4 [11][12] - **United States**: In Q3, the US C3 production remained high, with an average of 2.85 million barrels/day. From January to August, the total LPG export was 45,455 KT, with a year - on - year increase of 3.62%. It is expected that the Q4 export volume will remain high, with an estimated C3 production of 2.8 million barrels/day [16] 3.2 Asian Demand Faces Challenges - **India**: From January to August, the total LPG import was 14,947 KT, with a year - on - year increase of 7.08%. In Q4, the import volume will remain high but the incremental growth will not be significant, expected to be around 2 - 2.1 million tons/month [21][23] - **South Korea and Japan**: South Korea's LPG import volume is expected to remain high in Q4, supported by seasonal demand and chemical demand. Japan's LPG production has been decreasing year by year, and the demand is highly dependent on imports. There will be a seasonal increase in Q4 [25][28] - **China**: The PDH industry is in an expansion cycle. As of now, PDH has suffered losses, and there is a risk of a decline in chemical demand in Q4. The C4 demand and MTBE demand are also expected to decline seasonally [31][34] 3.3 Freight Rates Expected to Fluctuate at a High Level - Since the Sino - US trade friction in April, the freight rate from the US Gulf to the Far East has been rising. In Q4, the freight rate is expected to remain at a high level due to the resilient US export and the number of ships detouring the Cape of Good Hope remaining higher than in previous years [39] Chapter 4: Valuation Feedback and Supply - Demand Outlook 4.1 Valuation Feedback - **Gas - oil ratio**: It is relatively neutral to high and may continue to rise if crude oil production increases in Q4 [44] - **PN spread**: It is relatively neutral to low and is expected to remain low in Q4 [46] - **PDH profit**: It is currently in a loss state and is expected to remain low in Q4 [48] 4.2 Overseas Supply - Demand Outlook - Supply will remain resilient in Q4, while demand in the Asian market has limited growth, mainly from seasonal factors. Chemical demand may be suppressed by profit decline [50] 4.3 Domestic Supply - Demand Outlook - **Supply**: Domestic LPG production is expected to remain at a high level in Q4, but the import volume may be affected by PDH profit and maintenance [51][54] - **Demand**: Chemical demand will decline in Q4, while the increase in combustion demand will not be significant as this winter is likely to be a warm winter [55]