Recent Market Intelligence Report on Propylene

I. Recent Price Trends
- Futures Market:
- On May 25, 2026, the main contract of propylene (PLm) closed at RMB 8,354.0 per ton, down RMB 116.0 per ton (–1.37%) from the previous trading day.
- On May 22, the national average spot price of propylene stood at RMB 9,084.77 per ton, down RMB 11.92 per ton (–0.13%) from the prior day.
- In early May, propylene prices surged to a peak of RMB 9,824 per ton; however, prices retreated from highs in mid-May. The average price for May is expected to settle around RMB 8,950 per ton.

- Spot Market:
- On May 20, the reference price for propylene was RMB 9,167.67 per ton—down 3.44% compared to RMB 9,494.33 per ton on May 1.
- On May 15, the reference price stood at RMB 9,221.92 per ton, declining RMB 21.15 per ton (–0.23%) from the previous day.

II. Analysis of Influencing Factors
- Cost Side:
- Crude oil price volatility significantly impacts propylene production costs. Recently, Middle East geopolitical tensions and sharp increases in crude oil and propane prices have elevated propylene production costs.
- The methanol market has been frequently disturbed by macroeconomic news, with tight supply-demand fundamentals providing strong support to the propylene market.

- Supply Side:
- In early May, several propylene units in Shandong, East China, and Northeast China reduced operating loads or underwent unplanned shutdowns, leading to relatively tight spot supply.
- From mid-May onward, supply increased as some units resumed operations and new capacity came online.

- Demand Side:
- Downstream demand—primarily from polypropylene (PP) and propylene oxide (PO) plants—is directly affected by their operating rates. Recently, some downstream facilities reduced loads or suspended operations due to cost pressures or scheduled maintenance, resulting in weakened propylene demand.
- Rising demand for plastic products during summer may boost propylene consumption; conversely, winter demand tends to be comparatively lower.

- Macroeconomic & Geopolitical Factors:
- Middle East geopolitical conflicts and U.S.–Iran negotiations significantly influence global oil prices and, consequently, the propylene market.
- Broader macroeconomic conditions—including GDP growth rates and monetary policy—also exert influence on the propylene market.

III. Market Outlook and Assessment
- Short-Term Trend:
- The propylene market has recently exhibited a pattern of “repeated oscillation with resistance at high price levels.” Support from the cost side has weakened, supply has increased amid new capacity releases, while demand remains sluggish due to seasonal weakness and cost pressures.
- In the near term, propylene prices are expected to remain weak and range-bound, with narrowing volatility.

- Medium- to Long-Term Trend:
- As the global economy recovers and manufacturing expands, demand for propylene and its derivatives will continue growing. However, oversupply risks and environmental regulations may constrain the pace of propylene capacity expansion.
- Going forward, the propylene market will evolve into a dynamic equilibrium shaped by supply–demand interactions, with price trends influenced by cost structures, supply dynamics, demand conditions, and macroeconomic/geopolitical developments.

IV. Forward Outlook
- Price Range Forecast:
- In the short term, propylene prices are projected to fluctuate within the RMB 8,300–8,500 per ton range. Prices may rebound if cost-side support strengthens or unexpected supply reductions occur; conversely, sustained demand weakness or supply overexpansion could push prices lower.

- Market Trend Outlook:
- In the long run, the propylene market is expected to mature and stabilize gradually. With continuous commissioning of new capacity and intensifying competition, economically inefficient production units face increasing risk of phase-out, leading to improved overall capacity utilization.
- Technological innovation and industrial upgrading will be critical for the propylene industry to cope with competitive pressures and stringent environmental requirements. Future investment efforts will focus increasingly on process optimization, equipment modernization, energy conservation, and emissions reduction.