According to data analysis from Shengyi Society, as of December 9th, the benchmark price of propylene in Shengyi Society was 6223.25 yuan/ton, an increase of 0.69% compared to the beginning of this month (6180.75 yuan/ton). Although prices have risen, the core downstream demand remains weak, resulting in a lack of momentum for price increases.
Supply side:
The overall operating rate of the industry remains at around 74%. Some PDH devices are expected to restart, and there is a possibility of increased supply.
Demand side:
Polypropylene: As the largest consumer sector of propylene, the PP industry is experiencing deep production losses and proactive reduction of burdens. As of the second week of December, the industry’s production profit remained in the deep loss range of around -300 yuan/ton. As a result, its operating load rate has dropped to a low of 40% -42%. As of December 9th, the benchmark price for PP (wire drawing) in Shengyi Society was 6330.00 yuan/ton, a decrease of 0.52% compared to the beginning of this month (6363.33 yuan/ton).
Epoxy propane (PO): Although the industry’s profit has slightly recovered from the loss line, maintaining a rigid procurement strategy for raw material propylene makes it difficult to form a sustained demand for replenishment. As of December 9th, the benchmark price of epoxy propane in Shengyi Society was 8166.67 yuan/ton, an increase of 2.94% compared to the beginning of this month (7933.33 yuan/ton).
Acrylic acid: The industry’s production and profits are relatively stable, providing fundamental support for the demand for acrylic acid. However, due to its limited total demand and growth space, it is unable to offset the gap of declining demand for PP powder. As of December 9th, the benchmark price of acrylic acid in Shengyi Society was 6066.67 yuan/ton, a decrease of 0.27% compared to the beginning of this month (6083.33 yuan/ton).
Acrylonitrile (AN): The industry is in an unsustainable state of “high production and high losses”. Behind the current operating rate of around 81% is a cash flow loss of over -500 yuan/ton. Its high load operation is mainly due to market share and cash flow considerations, but it has become a significant potential risk point in downstream demand, and there is a possibility of centralized maintenance due to intensified losses in the future. As of December 9th, the benchmark price of acrylonitrile in Shengyi Society was 7833.33 yuan/ton, a decrease of 0.84% compared to the beginning of this month (7900.00 yuan/ton).
Cost aspect:
International oil prices are trending towards volatility, and the pressure of medium to long-term oversupply still exists, resulting in insufficient cost support for propylene. The relatively firm price of propane has led to continuous losses in the PDH (propane dehydrogenation) process route, but has not yet triggered large-scale maintenance and production reduction.
In summary, the current core logic of the propylene market is a rebalancing driven by demand contraction. The widespread losses and low profits in downstream industries have formed a negative transmission of raw material demand by reducing operating rates. Until there is no significant recovery in terminal consumption and downstream product inventory is effectively depleted, it is expected that propylene prices will maintain a low volatility pattern, and its rebound space will continue to be strictly constrained by demand. The focus of observing market trends is on the profit recovery process of the PP powder industry and whether industries such as acrylonitrile will experience supply contraction due to cash flow pressure.
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