Polypropylene margins stay tight as propylene spot prices jump 9-14% on crude rally

Rising International Crude Oil Prices: On Friday (October 30), the NYMEX WTI crude oil futures December contract closed at $104.12/barrel, an increase of $2.12/barrel (+2.08% week-on-week). The ICE Brent crude oil futures December contract closed at $117.64/barrel, an increase of $2.76/barrel (+2.40% week-on-week). The INE Shanghai crude oil futures 2612 contract fell by 8.3 to CNY 727.6/barrel during the day session but rose by 30.9 to CNY 758.5/barrel in the night session.
Propylene Production Costs: As of October 29, the cost of propylene production via naphtha cracking was approximately CNY 10,010/ton; via Propane Dehydrogenation (PDH) it was approximately CNY 10,175/ton; and via Methanol-to-Olefins (MTO) using externally purchased methanol, it was approximately CNY 11,662/ton.
Narrow Price Spread: As of October 30, the spot price of propylene in Shandong was CNY 11,925/ton, while Polypropylene (PP) powder (Linyi 045 grade) was priced at CNY 11,700/ton, resulting in a very narrow spread between the two.

Core Logic: Rising international crude oil prices, minor fluctuations in production costs, and a narrow spread between PP and propylene prices.

Product	Region	Oct 23	Oct 30	Change Rate
Propylene	Shandong	10,700–10,820	11,850–12,000	+10.83%
Propylene	East China	10,600–10,800	11,500–11,950	+9.58%
Propylene	Northeast China	10,320–10,430	11,490–11,600	+11.28%
Propylene	Northwest China	9,810–10,300	11,430–11,430	+13.67%
Notes: 1. This table reflects mainstream transaction prices in key propylene markets. All prices are VAT-inclusive and quoted in CNY/ton. 2. The prices represent point-in-time values from the two preceding working weeks, not weekly averages. 3. The change rate indicates the week-on-week percentage variation.

Propylene Industry Supply & Demand Data
Data Type	Oct 22	Oct 29	Change Rate	Weekly Outlook
Weekly Output	1.1379 million tons	1.1354 million tons	-0.22%	↘
Capacity Utilization (PDH)	72.95%	73.72%	+1.06%	↗
Production Profit (PDH)	119	727	+510.92%	↗
Notes: 1. Daily output data compares national sample enterprise production across the previous two working weeks. 2. Capacity utilization reflects the ratio of actual device output to total capacity, indicating production levels. 3. Production profit is industry-wide data reflecting overall profitability in mainstream regions, calculated as the ratio of industry profit to average price.

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