Multiple Positive Factors Drive Strong End to March for Propylene, April Expected to Continue Upward Trend | propylene oxide 75-56-9 Price Impact

【Introduction】 In March, the domestic propylene market in China concluded with a robust rally, bolstered by multiple supportive factors including geopolitical tensions in the Middle East, rising feedstock costs, and concentrated plant maintenance. By March 30, the monthly average price in Shandong had surged to 8,198 yuan/ton, marking a 27% increase month-on-month. Looking ahead to April, the overall supply-demand landscape is expected to show dual weakness. However, supply tightness—driven by intensified plant maintenance and reduced imports—will dominate the market logic. Coupled with rigid demand from downstream profitable products providing underlying support, prices are projected to remain firm. The monthly average price is expected to center around 8,500 yuan/ton, with potential for further upward exploration.

Why is the propylene market likely to stay firm in April despite dual weakness in supply and demand? Let's briefly analyze the fundamentals and market linkages.

I. Supply Side: Intensified Plant Maintenance Aggravates Supply Contraction

| Figure 1: Domestic Propylene Output and Capacity Utilization Rate Trend (2025-2026, 10k tons) |
| :--- |
| |
| Data Source: chempricehub |

Data Source: chempricehub

The wave of domestic propylene plant maintenance in March, a key driver of price increases, is set to intensify in April, further tightening supply. As shown in the capacity utilization trend, China's propylene capacity utilization rate dropped to 70.2% in March 2026, a significant decline from previous periods, and is projected to fall further to 67.2% in April, indicating increasing supply-side pressure.

As shown in the table above, the operational status of domestic PDH units, a core production process for propylene, directly impacts market supply. According to chempricehub data, 16 PDH units are currently shut down, involving 8.45 million tons of capacity, leading to a theoretical daily supply reduction of 20,000-25,000 tons. Shutdowns for maintenance have become the industry norm. In April, maintenance is scheduled for additional key PDH units such as Donghua Maoming, Qixiang Tengda, and Jiangsu Ruiheng, alongside some local refinery units. This overlapping maintenance will further tighten domestic propylene supply, with monthly output in April expected to drop by 380,000 tons to 4.75 million tons.

Furthermore, uncertainties in feedstock supply due to Middle East geopolitical tensions persist, continuously affecting the stability of propylene feedstocks like propane. There remains a possibility of unexpected shutdowns at operating units due to feedstock issues, which could further reduce overall domestic propylene output and reinforce the supply shortage.

II. Demand Side: Downstream Demand Structure Diverges, Rigid Demand Provides Support

April marks the traditional peak maintenance season for propylene downstream sectors, leading to an overall weakening in demand. However, performance varies by product, with profitable products continuing to provide essential rigid demand support.

From the downstream operating rate trends, the operating rate for PP granules was 70.83% in March 2026, and for PP powder was 25.81%. Both are expected to decline further in April to 68.58% and 21.14%, respectively. Besides PP, operating rates for other key downstream products like PO and 2-EH also showed significant declines, down 4.4% and 4.1% month-on-month respectively, constituting the main reason for demand weakness. According to chempricehub forecasts, total propylene consumption in April is expected to drop to 4.936 million tons, down 5.0% month-on-month, indicating a lack of expansion momentum in overall demand.

Despite the overall demand decline, structural differentiation provides crucial market support. Products like propylene oxide (PO) and 2-EH currently maintain healthy profit margins, sustaining stable procurement demand for propylene feedstock. This serves as the core underpinning force on the demand side, partially offsetting the consumption contraction caused by maintenance in other downstream sectors.

III. Supply-Demand Balance: Dual Weakness Emerges, Supply Contraction Becomes Core Driver

| Figure 1: Domestic Propylene Output and Capacity Utilization Rate Trend (2025-2026, 10k tons) |
| :--- |
| |
| Data Source: chempricehub |

According to chempricehub supply-demand forecasts, total propylene supply in April is estimated at 4.87 million tons against demand of 4.939 million tons, narrowing the supply-demand gap to -69,000 tons. While price increases and their transmission vary across the propylene downstream chain, causing periodic negative feedback on propylene, the medium-to-long-term trend points towards gradually tightening feedstock supply and overall volume reduction in the propylene industry chain. This expanding supply gap is expected to continue driving product prices upward.

Considering both supply and demand, the domestic propylene market in April clearly exhibits a dual-weakness pattern. However, within this supply-demand dynamic, supply contraction becomes the dominant logic driving market trends. The re-widening supply-demand gap provides a solid foundation for firm prices.

Based on chempricehub forecast data, total propylene supply in April is approximately 4.87 million tons against demand of about 4.939 million tons, with the gap narrowing further to -69,000 tons, indicating a renewed supply shortage. Although differences in price increases and transmission among downstream products may cause periodic negative feedback, the medium-to-long-term trend of gradually tightening feedstock supply remains unchanged. With the overall propylene chain operating at reduced volumes, the supply gap is likely to expand further, continuing to push propylene prices higher.

IV. Market Outlook: Firm Operation in April, Prices Expected to Explore Higher Levels

Overall, the core price driver for domestic propylene in April will remain fundamentally supply-demand driven. Within the overall dual-weakness context, supply-side contraction support holds an absolute advantage. On the supply side, concentrated plant maintenance, feedstock supply disruptions, and reduced imports create a triple constraint, pushing capacity utilization down further to 67.2% and sustaining a tight supply situation. On the demand side, the traditional downstream maintenance season leads to a month-on-month decline in total consumption. However, rigid procurement from profitable products like PO and 2-EH provides effective underlying support, eliminating the risk of a sharp demand drop. Based on a comprehensive analysis of fundamentals and market linkages, chempricehub believes propylene market prices will maintain a firm trend in April, with the monthly average price centered around 8,500 yuan/ton, potentially exploring higher levels.

Given numerous market uncertainties, industry participants are advised to closely monitor the following four key areas:

Developments in Middle East geopolitical tensions and fluctuations in international crude oil prices.
The actual implementation progress of domestic propylene plant maintenance and potential early restarts.
Changes in profitability across downstream products and shifts in rigid procurement intensity.
The linkage effect between domestic and international propylene prices and actual changes in import/export volumes.

Welcome to Chempricehub

Comments