Propylene

Propylene Market Dynamics Report (Recent Commodity Market Intelligence)

I. Price Trends
- Recent Price Volatility: In April 2026, the domestic propylene market average price trended steadily upward. The monthly average price in Shandong Province stood at RMB 9,201.33/ton, an increase of 13.02% month-on-month; the monthly average in the East China region reached RMB 9,408.33/ton, up 12.58% MoM; and the Northeast region’s monthly average was RMB 8,940.67/ton, rising 14.89% MoM. As of April 30, the national propylene market average price was RMB 9,630/ton, up 10.06% from the end of March. In June, propylene futures prices exhibited a volatile pattern; on June 26, the main contract (PLm) closed at RMB 6,684/ton, rising 2.45% from the previous trading day.
- Regional Price Differentials: Propylene prices varied across regions, with Shandong and East China posting relatively higher prices, while the Northeast region registered comparatively lower levels.

II. Supply and Demand
- Supply Situation:
- In April, several propylene units in Shandong, East China, and Northeast China operated at reduced loads or underwent temporary shutdowns, tightening spot supply. Subsequently, a PDH unit in North China resumed operations; meanwhile, in late April, restart expectations emerged for previously idled propylene units in Shandong, and one manufacturer resumed spot external sales of propylene. Concurrently, several butyraldehyde/octanol units halted operations, and a propylene nitrile plant announced its scheduled maintenance plan—both supply- and demand-side developments influenced propylene pricing.
- In June, operating rates for polyolefins and propylene failed to rise further. Persistently low inventories kept polyolefin spot supplies tight, lending some support to the propylene market. However, a cluster of planned restarts is expected from late June through early July, strengthening the market’s expectation of supply recovery.
- Demand Situation:
- In April, the restart of certain polypropylene (PP) units and active downstream procurement drove price increases initially. However, following the resumption of a PDH unit in North China, downstream cost pressures intensified, leading to reduced operating rates at several PP and propylene oxide (PO) facilities, and weakening demand. From mid-month onward, numerous PP powder producers fell into deep losses, prompting widespread plant shutdowns and maintaining industry operating rates at low levels—downstream demand remained weak.
- In June, polyolefin imports are expected to gradually rebound, while exports have already peaked. With high domestic spot prices, the export window has effectively closed, diminishing manufacturers’ export incentives. Meanwhile, although downstream processing margins have stabilized gradually, order recovery remains incomplete, and no concentrated restocking activity has yet been triggered in the short term.

III. Cost Factors
- Feedstock Prices: In April, U.S.–Iran negotiation news contributed to oil price volatility and a downward correction in international crude oil prices. Nevertheless, robust crude oil performance coupled with tight domestic propane supply strengthened producers’ willingness to maintain or raise prices; thus, propane prices rose amid overall market volatility, providing strong cost support to the propylene market.
- Strength of Cost Support: Cost-side support remained notably favorable, bolstering producers’ pricing confidence. However, as geopolitical dynamics evolved and supply recovery expectations intensified, the strength of cost support gradually weakened.

IV. Influence of Related Products
- Polypropylene (PP): As the largest downstream derivative of propylene, PP significantly influences propylene market dynamics. In April, the national average price of PP granules increased by 0.90% MoM. Early-month gains stemmed from tightened supply expectations and petrochemical enterprises raising their ex-factory prices, underpinned by surging crude oil prices. Mid-month onward, sentiment shifted: crude oil prices retreated, eroding cost support; concurrently, downstream users entered inventory digestion phases, markedly reducing purchasing enthusiasm.
- Propylene Oxide (PO): In April, the domestic PO market displayed a pronounced “surge-and-recede” pattern. At the beginning of the month, prices climbed continuously, supported by three converging factors: cost pressure, concentrated maintenance at major production facilities causing supply contraction, and downstream polyether producers’ pre-emptive stockpiling ahead of the cancellation of export tax rebates. From mid-to-late April, downstream resistance to high raw material prices intensified, significantly weakening demand. Meanwhile, previously idled units gradually resumed operations, increasing supply expectations and triggering a rapid price correction from elevated levels.
- 2-Ethylhexanol (Octanol): In April, the national octanol market average price declined by 5.54% MoM. During the first half of the month, cost-driven optimism, active downstream procurement, and export orders tightened spot availability, pushing negotiated prices upward. Mid-month, the U.S.–Iran announcement of a two-week ceasefire dampened market sentiment, prompting downstream buyers to pause purchases and lowering the bargaining range. In the latter half of the month, prices first rose then fell; when octanol dropped to RMB 9,000/ton, downstream users purchased opportunistically, and short-term outages at select plants sustained tight spot supply, supporting price stabilization and modest upward adjustments in negotiations. However, in late April, restarted maintenance units increased supply, while key downstream plasticizer orders remained sluggish, resulting in cautious procurement and poor octanol transaction volumes—producers were forced to cut prices to clear inventory.

Analysis & Outlook
- Short-Term Outlook: In the near term, the propylene market faces downward price pressure due to strengthened expectations of supply recovery, sluggish downstream demand, and diminishing cost support. Nevertheless, persistently tight polyolefin spot supplies continue to provide a degree of price floor support, limiting downside risks.
- Medium-Term Outlook: Over the medium term, evolving geopolitical developments, crude oil price fluctuations, and the gradual commissioning of new capacity will further recalibrate the propylene supply–demand balance. Should downstream demand fail to recover promptly, prices may continue to fluctuate downward.
- Long-Term Outlook: In the long run, the propylene industry will transition from a “price-decline phase” to a “capacity rationalization phase.” The market will require an extended period to determine how much production capacity becomes economically nonviable under persistently low price levels. Industry profitability will hinge upon companies’ cost control capabilities, technological advancement toward low-carbon production, and success in upgrading product value-addedness.

Forecast
- Price Range: Propylene prices in July are projected to trade within the RMB 5,800–6,100/ton range. Significant upward shifts in the global oil price benchmark or substantial changes in supply–demand fundamentals could adjust this forecast range accordingly.
- Market Trend: As high-cost capacity exits the market gradually and industry operating rates recover incrementally, the propylene market is expected to achieve a renewed supply–demand equilibrium. However, this rebalancing process will likely entail significant price volatility and uncertainty.