Industry Investment Ratings - Crude oil: ★☆☆ [1] - Fuel oil: ☆☆☆ [1] - Low-sulfur fuel oil: ★☆☆ [1] - Asphalt: ★☆☆ [1] - Liquefied petroleum gas: ☆☆☆ [1] Core Views - The short-term view on oil prices is oscillating and bullish, and investors can still focus on the hedging value of out-of-the-money call options on crude oil [2] - The crack spreads of FU and LU are both weak due to the soft fundamentals of the high- and low-sulfur fuel oil markets and the short-term macro and geopolitical support in the crude oil market [2] - The unilateral trend of asphalt follows the direction of crude oil, but the fluctuation range is relatively limited, and the low inventory still provides some support for the price [3] - The LPG market is under pressure overall, with the price running at a low level due to the downward pressure on the overseas market and the increased pressure on the delivery discount of the futures [4] Summary by Category Crude Oil - Overnight international oil prices declined, with the Brent 09 contract falling 1.25%. The trade war suppressed market sentiment, but there were still supporting factors for sanctioned oil [2] - Trump advanced the deadline for sanctions against Russia to August 8. Last week, Indian state-owned refineries suspended purchases of Russian oil, and the US issued a new round of sanctions against Iran [2] Fuel Oil & Low-Sulfur Fuel Oil - The oscillating and bullish pattern of crude oil remains unchanged, but the futures of the fuel oil series have weakened. The LU2509 contract is temporarily supported at around 3,643 yuan/ton, and the FU and LU cracks continue to decline [2] - The arrival volume in the Singapore market increased significantly in July, and the demand for ship bunkering lacked support after the peak season. The ship bunkering volume in Fujairah has been weakening month-on-month since June [2] Asphalt - Asphalt performed strongly among oil product futures today. The domestic production volume in August decreased month-on-month compared to July, and the demand recovery was delayed in the South due to typhoon and rainfall [3] - The shipments of 54 sample refineries remained flat month-on-month, and the cumulative year-on-year increase since July was stable. The commercial inventory of asphalt has been slow to decline [3] Liquefied Petroleum Gas (LPG) - The Middle East CP was significantly reduced, increasing the pressure of oversupply on the overseas market. The chemical profit margin improved after the import cost decreased, and there is still room for an increase in the PDH operating rate [4] - The supply was relatively loose with the overall increase in the arrival volume in July, and the domestic market was under pressure. The strengthening of crude oil recently increased the pressure on the delivery discount of the futures [4]

Group 1: Market Analysis - On July 31, regional prices were as follows: Shandong market, 4450 - 4580; Northeast market, 4140 - 4500; North China market, 4530 - 4650; East China market, 4280 - 4600; Yangtze River market, 4400 - 4620; Northwest market, 4100 - 4350; South China market, 4398 - 4500 [1] - In the second half of August 2025, the CIF price of frozen propane in East China was 545 USD/ton, down 5 USD/ton, and butane was 513 USD/ton, down 15 USD/ton. In RMB terms, propane was 4290 yuan/ton, down 36 yuan/ton, and butane was 4038 yuan/ton, down 115 yuan/ton. In South China, the CIF price of frozen propane was 538 USD/ton, down 5 USD/ton, and butane was 506 USD/ton, down 15 USD/ton. In RMB, propane was 4234 yuan/ton, down 37 yuan/ton, and butane was 3983 yuan/ton, down 115 yuan/ton [1] - Saudi Aramco announced the August CP price, with both propane and butane significantly lower than July. Propane was 520 USD/ton, down 55 USD/ton from last month, and butane was 490 USD/ton, also down 55 USD/ton. Domestic LPG prices partially fell, with East China's LPG maintaining stable sales. The upstream's shipping pressure was not high, but the high import volume and expected CP decline suppressed market sentiment. The sharp drop in CP prices reflected the weak fundamentals of LPG, with abundant overseas supply, no significant reduction in domestic production, and high imports and port inventories. The demand for civil gas was in the off - season, and the combustion demand was weak. Although the profit of PDH in deep - processing improved marginally and the operating rate increased, the subsequent growth momentum was limited [1] Group 2: Strategy - Unilateral: Oscillating, pay attention to bottom - building signals on the disk. There are no strategies for inter - period, inter - variety, spot - futures, or options [2]

Report Summary 1. Report Industry Investment Rating - Not provided 2. Core View - The domestic LPG market is expected to continue its narrow - range oscillation. International LPG prices are weak, and an increase in warehouse receipts suppresses the market. Although domestic chemical demand is rising, weak combustion demand restricts price increases [1]. 3. Key Points by Relevant Information Price Changes - **Daily Changes (July 30)**: There was no change in South China and East China LPG prices, Shandong LPG decreased by 20 yuan, propane CFR South China dropped by 5 dollars, propane CIF Japan rose by 28 dollars, MB propane spot increased by 2 dollars, CP forecast contract price decreased by 2 dollars, Shandong ether - after carbon four rose by 100 yuan, Shandong alkylated oil increased by 50 yuan, paper import profit rose by 28 dollars, and the main basis weakened by 24 yuan [1]. - **PG Market**: The PG market oscillated. The cheapest deliverable was East China civil LPG at 4413 yuan/ton. The basis weakened to 370 (-63). The inter - month reverse spread continued to strengthen. Warehouse receipt registrations reached 9804 lots (+1000), with 1000 lots added by Qingdao Yunda [1]. - **Regional Spreads**: PG - CP reached 43 (+18), FEI - MB was 155 (-6), FEI - CP was 4.5 (+4.5), and FEI - MOPJ changed little at -47.5 (-3.75). The US - Asia arbitrage window was closed, and the FEI propane discount continued to decline [1]. Market Conditions - **Supply and Demand**: The arrival volume decreased significantly. In South China, typhoons delayed vessel arrivals, leading to a decline in port inventories and a slight increase in factory inventories. The commodity volume decreased by 0.53%. Chemical demand was strong, with PDH operating rates rising significantly to 73.13% (+2.01 pct), and MTBE and alkylation operating rates also increasing [1]. - **Production Profits**: PDH profits improved, while MTBE export profits declined. FEI and CP - based PP production profits oscillated, with CP having a lower production cost than FEI [1]. Weekly Outlook - The domestic LPG market is expected to continue narrow - range oscillations. Chemical demand is strong, but weak combustion demand will continue to suppress price increases [1].

Report Information - Report Title: C3 Industry Chain Weekly Report - Report Date: July 27, 2025 - Author: Chen Xinchao from Guotai Junan Futures Research Institute [1] Industry Investment Rating - Not provided in the report Core Views - **LPG**: This week, the domestic civil LPG market faced weak supply and demand. The supply slightly contracted, but the seasonal demand was weak, and international LPG prices declined, resulting in a narrow and weak price fluctuation. The price of etherified C4 first fell and then rose. Next week, civil demand is expected to remain seasonally weak, while the overall chemical production is likely to receive some short - term boost [3]. - **Propylene**: This week, the domestic propylene market supply increased slightly, while the overall downstream demand decreased slightly. The market price first rose and then fell. The supply - demand gap widened, and the price was under pressure [4]. Summary by Sections LPG Section Price & Spread - **Futures and Paper Goods Prices**: The prices of LPG futures and paper goods showed certain fluctuations. The international propane price weakened and then rebounded slightly at the end of the week, with FEI propane in a deep discount state [7][17]. - **Domestic Spot and Basis**: The prices of domestic civil LPG and other LPG products in different regions had varying degrees of changes. The basis also showed corresponding fluctuations [8]. - **International Propane**: The international propane price weakened and then rebounded slightly. The FEI propane was in a deep discount state, and the freight rates and arbitrage spaces also changed [17][18]. Supply - **US Propane Shipment**: The shipment of US propane to Japan, South Korea, and Europe increased, while the shipment to China decreased significantly [27]. - **Middle - East LPG Shipment**: Except for Kuwait, the LPG shipments from other Middle - East regions decreased this period. The shipment to China decreased, while the shipments to India and Southeast Asia increased [36][43]. - **Imports and Domestic Production**: The total LPG commodity volume was 52.5 tons, remaining unchanged from last week. The civil LPG commodity volume was 21.0 tons (-0.2%), and the etherified C4 commodity volume was 17.6 tons (+0.5%). The international propane arrival decreased by 16.7 tons [3][54]. Demand & Inventory - **Chemical Demand**: Chemical demand continued to recover slightly. The PDH operating rate increased slightly, and the MTBE operating rate continued to rise to 69.0%, a 1.4% increase from the previous week [3]. - **Inventory**: The domestic refinery inventory of LPG showed different trends in different regions. The civil LPG refinery inventory increased slightly, and the LPG terminal inventory in East China increased, while the inventory in other regions decreased [77][81][91]. Propylene Section Price & Spread - **Industrial Chain Prices**: The prices of upstream and downstream products in the propylene industrial chain changed to varying degrees. The prices of some raw materials decreased, while the prices of some products increased or decreased slightly [102][103]. - **International and Domestic Propylene Prices**: International propylene prices decreased slightly, and domestic propylene prices in different regions also showed different trends. The prices in Shandong and East China increased, while the price in North China decreased [102][113][117]. Balance Sheet - **Operating Rates**: The operating rates of various production processes in the propylene industry increased slightly. The operating rates of downstream products such as PP powder and acrylic acid increased slightly, while the operating rates of PP pellets and PO changed little, and many butanol and phenol - acetone plants were under maintenance [4][120]. - **Supply - Demand Balance**: The supply of the domestic propylene market increased slightly this week, while the overall downstream demand decreased slightly. The supply - demand gap widened [4].

Report Key Points 1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - Despite the strong chemical demand outlook, the decline in oil prices and international LPG prices has led to a weakening of the PG market. The domestic LPG market is expected to continue its narrow - range oscillation due to weak combustion demand [1] 3. Summary by Related Catalogs Price and Basis - From July 1 to July 22, prices of various LPG products showed different changes. For example, the price of South China LPG increased from 4530 to 4570, while the price of Shandong liquefied gas decreased from 4486 to 4443. The basis of the main contract strengthened to 433 (+93), and the 08 - 09 month - spread was 38 [1] International Market and Arbitrage - FEI and CP continued to decline, while PP was running strongly. The production profit of PP made from FEI and CP improved, and the CP production cost was lower than that of FEI. The US - to - Far - East arbitrage window opened, and AFEI propane dropped significantly [1] Inventory and Supply - High unloading volumes led to a significant build - up of port inventories and a small build - up of factory inventories. The commodity volume decreased by 0.98%, mainly due to reduced external sales from the main refineries in South China's Maoming, increased self - use in Shandong, and limited supply in East China [1] Demand - Chemical demand was strong. The PDH operating rate increased significantly to 71.78% (+10.91pct), and the alkylation operating rate also increased. MTBE export orders increased, but combustion demand was weak [1]

Core Viewpoint - The article discusses the ongoing legal and administrative challenges faced by Yongxing Gas in obtaining a license for bottled liquefied petroleum gas (LPG) operations, highlighting issues of regulatory compliance and bureaucratic obstacles [2][27]. Group 1: License Application Process - Yongxing Gas has been applying for a bottled LPG operating license since 2016, but has repeatedly faced rejections from the Yuyao Housing and Urban-Rural Development Bureau [2][3]. - The Yuyao Housing Bureau has issued multiple decisions denying the license, which have been overturned by the Yuyao Municipal Government and the courts, yet the Bureau continues to deny the application [2][27]. - The Zhejiang Provincial High Court criticized the Yuyao Housing Bureau for its repeated refusals, stating it constituted an abuse of power and wasted judicial resources [2][27]. Group 2: Regulatory Framework - The regulatory environment for bottled LPG in Ningbo requires a specific operating license, which Yongxing Gas has not obtained despite its long-standing operations in the sector [7][9]. - The 2014 revision of the Ningbo Gas Management Regulations mandated that companies must obtain a license to operate bottled gas, which Yongxing Gas failed to apply for initially [11][12]. - The distinction between industrial and civil bottled gas operations is significant, with different regulatory requirements and oversight bodies involved [9][10]. Group 3: Legal Proceedings and Outcomes - Following a series of administrative rejections, Yongxing Gas has engaged in legal battles, with the courts often siding with the company against the Yuyao Housing Bureau's decisions [19][26]. - The company faced criminal charges for illegal operations but was later not prosecuted due to the court's rulings favoring its licensing claims [32][35]. - In 2021, a memorandum of understanding was reached between the Yuyao Housing Bureau and Yongxing Gas, outlining steps for the company to provide necessary documentation for the license application [31]. Group 4: Current Status and Future Outlook - As of 2024, the Yuyao Housing Bureau indicated that it no longer has the authority to approve the license, as the approval process has been elevated to the Ningbo City Bureau [3][37]. - The new gas planning regulations in Yuyao further restrict the establishment of new gas supply stations, making it increasingly difficult for Yongxing Gas to obtain the necessary operating license [37]. - Yongxing Gas has expressed concerns that the likelihood of obtaining the bottled LPG license is diminishing under the new regulatory framework [37].

Group 1 - The liquefied petroleum gas (LPG) production in Shanghai for April 2025 was 59,000 tons, representing a year-on-year decrease of 36.7% and a decline of 17.9 percentage points compared to the same month last year [1] - For the first four months of 2025, the total LPG production in Shanghai was 323,000 tons, which is a 15.0% decrease year-on-year, with a reduction of 2.2 percentage points compared to the same period last year [3] - The LPG production in Shanghai accounted for 1.4% of the national LPG production of 4,084,000 tons in April 2025, and 1.8% of the national total of 17,653,000 tons for the first four months of 2025 [1][3] Group 2 - The data reflects the production statistics from large-scale industrial enterprises, defined as those with annual main business revenues of 20 million yuan or more [4] - The decline in LPG production in Shanghai is significantly higher than the national average, indicating potential challenges within the local industry [1][3]

Report Industry Investment Ratings - Crude oil: ★☆☆ [1] - Fuel oil: ☆☆☆ [1] - Low-sulfur fuel oil: ★☆☆ [1] - Asphalt: ★☆☆ [1] - Liquefied petroleum gas: ★☆☆ [1] Core Views - The report provides a comprehensive analysis of the energy market, including crude oil, fuel oil, low-sulfur fuel oil, asphalt, and liquefied petroleum gas. It assesses the supply and demand dynamics, price trends, and investment opportunities in each sector [2][3][4]. Summary by Category Crude Oil - Overnight international oil prices rose, with the SC08 contract up 1.76%. The US EIA inventory unexpectedly increased by 712,800 barrels, and OPEC+ continued its rapid production increase strategy, strengthening the supply-demand loosening expectation, especially in the fourth quarter. However, in the third quarter, oil consumption during the peak season supports physical crude oil purchases, and the supply disruption of European diesel leads to expectations of refining profit recovery. The final outcome of the US reciprocal tariffs, postponed to August 1st, is likely to be weaker than in early April. The Middle East geopolitical risks related to the Iran nuclear dispute remain. The report maintains a view that crude oil prices will rise from the bottom and fluctuate strongly in the third quarter, and short-selling strategies should be considered after the peak season's impact weakens [2]. Fuel Oil & Low-sulfur Fuel Oil - Crude oil led the rise in oil futures, followed by LU, while FU was relatively weak. For high-sulfur fuel oil, demand from ship bunkering and deep processing was low, and the summer power generation demand in the Middle East and North Africa did not boost it. The supply risk was removed as the Middle East conflict eased, and both the single price and crack spread of FU continued to weaken. For low-sulfur fuel oil, the previous strong coking profit led to limited short-term supply pressure due to the diversion effect, and the strengthening of the Singapore diesel crack spread since late June also provided some support. However, the demand lacked a clear driver, and LU's trend mainly followed crude oil, with the short-term crack spread expected to fluctuate [2]. Asphalt - In June, the actual refinery output exceeded the production plan by 100,000 tons (+4.3%), and the commercial inventory shifted from destocking to stocking in late June, with a stocking increase of 24,000 tons. The unplanned increase was the key variable that broke the asphalt destocking pattern. In July, the shipment volume of 54 sample refineries decreased slightly month-on-month, and the cumulative year-on-year increase in shipment volume since the beginning of the year dropped from 8% to 7%. The continuous high temperature and increased rainfall in many places are expected to delay the overall demand recovery. The sales volume of road rollers increased significantly year-on-year from January to May, and the third quarter is a crucial observation window for asphalt demand recovery. Currently, the single price trend of asphalt mainly follows crude oil, but the weakening fundamentals limit the upside space of BU [3]. Liquefied Petroleum Gas (LPG) - The international market supply is generally loose, and although crude oil has strengthened recently, the LPG price has remained stable. Last week, new maintenance led to a decline in chemical demand, but the decline in import costs continued to repair the PDH gross profit. Attention should be paid to the subsequent rebound rhythm of PDH operating rates. The supply pressure persists in summer, and the decline in import costs limits the upward momentum of the futures price, maintaining a weak and fluctuating trend [4].

Group 1 - The U.S. Treasury has authorized a general license related to sanctions, allowing the unloading of liquefied petroleum gas (LPG) cargoes in Venezuela until September 5 [1]

1. Report Industry Investment Rating - No relevant content provided. 2. Core Viewpoints of the Report - This week, Saudi Aramco's July CP was released, showing an unexpected decline. Propane was at $575/ton (-$25), and butane was at $545/ton (-$25), leading to a significant reduction in import costs. Domestic LPG production decreased slightly, and international vessel arrivals dropped. Civilian demand remained seasonally weak, while the chemical industry's demand showed mixed trends. Next week, civilian demand is expected to stay weak, and the chemical industry's overall start - up rate may be boosted in the short term. It is recommended to closely monitor OPEC+ production increases, downstream device operations, and import vessel arrivals [4]. 3. Summary According to the Table of Contents 3.1 Overview - Saudi Aramco's July CP prices for propane and butane decreased by $25/ton. Domestic LPG production totaled 538,000 tons, a slight reduction of 0.06%. Civilian gas production was 229,600 tons (-0.39%), and ether - after production was 163,300 tons (-0.55%). International vessel arrivals were 499,000 tons (-18.82%), and arrivals are expected to increase next week. Civilian combustion demand was seasonally weak. PDH operating rate was 65.49% (-5.05%), and MTBE operating rate was 65.05% (+0.66%). Civilian gas prices declined slightly, while ether - after C4 prices rose significantly. Next week, civilian demand will remain weak, and the chemical industry's start - up rate may be boosted [4]. 3.2 Price & Spread - The report presents data on LPG futures and spot prices, including LPG main contracts, APS propane main contracts, and AFE propane main contracts. It also shows the LPG forward curve, APS propane forward curve, and AFE propane forward curve. Additionally, it provides information on price differences such as PG08 - 09, PG08 - 05, APS propane main - continuous one, etc. Regional quotes, premiums, discounts, and freight rates are also covered, including historical data on US - to - Far - East freight, Middle - East - to - Far - East freight, etc. [7][11][12] 3.3 Supply - **US Exports**: The report shows historical data on US propane exports from 2019 - 2025, including exports to Europe, China, and Japan and South Korea [29][30][31]. - **Middle - East Exports**: It presents historical data on Middle - East LPG exports from 2019 - 2025, including exports from Iran, Kuwait, UAE, Saudi Arabia, and Qatar [35][36][37]. - **Domestic Supply**: Domestic LPG production totaled 538,000 tons (-0.06%). Propane supply in China was 545,400 tons, a 17.07% decrease. Domestic refinery production was 46,400 tons, a 7.91% increase. International vessel arrivals were 499,000 tons, mainly in Shandong. Inventory data for East China, South China, and Shandong are also provided [44][47][48]. 3.4 Demand - Chemical demand: PDH operating rate was 65.49% (-5.05%), and MTBE operating rate was 65.06% (+0.66%). The report also shows historical data on alkylation profit, domestic PDH operating rate, MTBE traditional profit, etc. [50][51]