Tight supply, strong rise in propylene market (11.28-12.2)

1、 Price trend



According to the data monitoring of the business community, the domestic propylene (Shandong) market rose many times this week, and the market trading atmosphere improved. The average price of Shandong market at the beginning of the week was 7436 yuan/ton, and the average price at the weekend was 77100 yuan/ton, with a weekly increase of 3.68%, up 10.08% from 30 days ago.


As of December 2, the mainstream prices of propylene in different regions in China are as follows:


Region/December 2

Shandong region./7650-7700 yuan/ton

Northeast China/7300-7400 yuan/ton

East China./7250-7300 yuan/ton

2、 Analysis and review


According to the monitoring of the business community, the propylene market performed well this week, and the price rose to a stage high. Due to the low price in the early stage, the effect of enterprise destocking was obvious, and the restart time of PDH in the market was delayed, leading to the tight supply of propylene in Shandong. With the steady follow-up of demand, the price of propylene was raised many times. As of this Friday, the price of propylene in Shandong has risen to a high level. With the inflow of low-end goods from the surrounding areas, the resistance to rising has increased. The offer of some enterprises has been slightly increased by 50 yuan/ton, and the mainstream offer of Shandong has been 7650-7700 yuan/ton.


Upstream: On the news side, crude oil prices stopped rising this week. As of the closing of December 1, WTI rose 0.67 to 81.22 dollars/barrel in January 2023, up 0.8%; In February 2023, Brent fell 0.09 to US $86.88 per barrel, down 0.1%. Crude oil is still expected to rise next week, supported by positive cost.


Downstream: The market of some downstream products declined mainly, but the commencement of some products was fair, and the demand for propylene was stable. Due to the rise of propylene price, the profit space of the polypropylene industry has shrunk, some enterprises have plans to reduce the burden, and other downstream derivatives have relatively stable demand.


3、 Future market forecast


According to the propylene analyst from the Chemical Branch of the Business Cooperative, the cost support is good, but the price rise inhibits downstream demand. Under the long short game, it is expected that the probability of Shandong propylene market declining next week will increase.