According to the commodity market analysis system of Shengyishe, the domestic propylene (Shandong) market saw a slight increase at the beginning of March, followed by a retracement of the increase, and an overall decline in March. On March 1st, the market average was 6870 yuan/ton, while on March 29th, the average price was 6790 yuan/ton, a monthly decrease of 1.17%, a decrease of 1.87% compared to the same period last year.

As of March 29th, the mainstream prices of propylene in some regions of China are as follows:

Region/ March 29th

Shandong region/ 6700-6750 yuan/ton

Northeast region/ 6350-6500 yuan/ton

East China region/ 6850-6900 yuan/ton

Supply side: tighten first and then loosen. At the beginning of the month, multiple propylene units were shut down, leading to a shortage of goods in the region and a temporary tightening of supply. Starting from mid month, with multiple upstream propylene units gradually resuming operation, the supply has shifted from tight to loose, and in the second half of the month, there was a situation of oversupply.

On the demand side, there is more decline than increase. The overall decline in downstream derivatives of propylene in March was greater than the increase. Isooctanol and isobutyraldehyde were negatively affected by both cost and demand, with a decline of 20.93% and 11.26% in March. The main downstream polypropylene market is weak and volatile, with average enthusiasm for purchasing propylene. Overall, the downstream demand side has poor support, which has a negative impact on propylene demand.

Cost side: still at a high level. In March, the cost side of liquefied gas, methanol, propane, etc. all experienced varying degrees of decline, weakening support for propylene, but remained relatively high. The gross profit of producing propylene from naphtha is about -138 US dollars per ton, the gross profit of producing propylene from PDH is about -300 yuan per ton, and the gross profit of producing propylene from methanol is about -500 yuan per ton.

Future Market Forecast

After a broad decline in late March, the price of propylene fell to a low point, and downstream investors entered the market on dips. At the end of the month, the market slightly rebounded. There is a possibility of multiple propylene units restarting in April, while new production capacity from Jincheng Petrochemical and CNOOC Fine are expected to be put into operation, leading to an increase in supply. In terms of demand, there are plans to restart downstream maintenance equipment in the early stage, which provides some support for the demand side. However, some of the demand remains in high demand, which has constrained the propylene market. Overall, the supply and demand side will maintain a state of oversupply in April, and it is expected that the price center will fluctuate downward.