China's LPG market rebounded sharply as geopolitical risks reshaped pricing, purchasing behavior and market sentiment.

China is no longer asking how much more gas or green power it can build, it is asking how existing supply gets priced, moved and actually used.

Domestic MTBE unit operating rate has been on a sustained downward trend since May and hit a five-year low in July with shutdowns accelerating sharply, particularly in Shandong, where the concentration of plant closures has been most pronounced.

China's gasoline and diesel inventories jumped year-on-year in H1 2026 amid limited exports, weak demand and new energy competition, weighing down oil product prices.

In H1 2026, the Strait of Hormuz closure cut LPG arrivals to 12.16 million tonnes in China, down 30.10% compared with H2 2025 and 27.73% YoY. Port inventories averaged 2.10 million tonnes, down 30.52% from H2 2025 and 27.32% YoY, remaining at historical lows. PDH operating rates plunged to 46.85%