OREANDA-NEWS  Wholesale prices for liquefied petroleum gases in Russia by mid-February decreased 9.6 times year-on-year, to 2.4 thousand rubles per 1 ton, which is a historical minimum in the history of trading on SPbMTSB. At the same time, there has been a sharp increase in the market in the last week: by February 17, the cost of propane-butane returned to the level of 3.6 thousand rubles per 1 ton, which is 6.4 times lower than in the same period of 2022. Compared to the previous day, the growth was almost 15%, by the beginning of the month, the quotes had increased by about 26%.

Over the past year, there has been great volatility on the stock exchange in the LPG trading sector, when the cost of petrochemical raw materials could change more than twice within one month.

For example, from mid-February 2022 to mid-March, the price decreased from 23.3 thousand rubles to 10 thousand rubles. In general, the quotations of LPG during 2022 only exceeded the level of 15 thousand rubles per 1 ton for several weeks. The peak occurred in September, but from October until the end of the year they were at a level below 10 thousand rubles, and from the beginning of 2023 they did not exceed 5 thousand rubles.

Market participants associate such sharp fluctuations with a surplus of LPG against the background of limited exports, and a decrease in prices in winter is a seasonal decrease in demand within Russia. Traditionally, Europe was the largest export market for Russian LPG, but supplies declined sharply after the outbreak of hostilities in Ukraine. According to the interlocutors of Kommersant, such volatility has become traditional on the stock exchange and will remain until the situation with the consumption of this product radically changes. Low export demand also affects prices. The interlocutors of Kommersant explain that foreign consumers in the Baltic States, Central Asia and China in January took a wait-and-see attitude against the background of the upcoming reduction of export duties on propane-butane mixture from February 1 to $21 per 1 ton from $46 per 1 ton in January.

In this regard, and also taking into account the end of the New Year holidays in China, by the end of February, traders expect a recovery in demand with an improvement in consumption dynamics in March, when the export duty will become zero for the first time since July 2021 against the background of record low export quotations of LPG (quotes on the Belarusian-Polish border serve as the basis for calculating the duty).