1、 Market dynamics

As of January 19th, the benchmark price of propylene in Shengyi Society was 6147.67 yuan/ton, an increase of 7.52% compared to the beginning of this month (5717.67 yuan/ton). The market entered the digestion stage after a rapid rise. Tightening supply and rising demand are the main driving forces. The shutdown of two PDH units in Qingdao and Yantai has intensified the supply shortage, while downstream Wanhua Chemical’s increased propylene production and the restart of Lihe and Jingbo PP units have jointly supported the situation of “overall strong gas purchasing”.
2、 Expected price trend
Short term stable digestion, range oscillation, and rapid price increase, downstream acceptance ability is facing a test. The downstream profit margin has been squeezed, which may suppress purchasing enthusiasm. There is a slight upward expectation in the medium to long term
Supply side: Under cost pressure, the enthusiasm for PDH unit operation is suppressed, and subsequent maintenance plans may provide support for supply.
Demand side: There is a need for downstream stocking before the Spring Festival in February, which may bring temporary support. The outsourcing behavior of enterprises such as Wanhua also provides sustained demand highlights.
Cost side: There is an expectation of an increase in the prices of major raw materials (crude oil, propane), and cost support may be strengthened.
3、 Risk points that need attention
1. Downstream bearing capacity: The continuous rise in propylene prices will squeeze downstream product profits, which may lead to insufficient demand momentum, which is the core constraint of the current market.
2. Supply recovery situation: Pay attention to the resumption progress of existing parking facilities and the actual deployment pace of new production capacity (planned to be put into operation in the first quarter of 1.9 million tons).
3. Cost side fluctuations: The trend of international crude oil and propane prices will directly affect propylene prices through cost channels.
Overall, the propylene market has emerged from a strong upward trend driven by unexpected supply contraction and increased external procurement by enterprises such as Wanhua. In the short term, due to high prices, there may be a need for consolidation, but in the medium term, there is still room for slight upward exploration under cost support, pre holiday stocking, and supply maintenance expectations.