[Lead]: This week, the domestic propylene market staged a repair-driven rebound. Firmer international crude oil prices and a stronger futures market, combined with tighter regional spot supply and improved spot trading activity, reinforced bullish expectations after a period of narrow consolidation. As of August 17, the mainstream average propylene price in Shandong reached 8,465 yuan/ton, up 3.36% from August 10. With clear near-term support, the propylene price is expected to return to the 8,700–8,800 yuan/ton high. At elevated price levels, however, downstream profitability pressure is gradually emerging. In the medium to long term, close attention should be paid to downstream margin trends and the pace of restarts at maintenance units. If supply is released intensively while demand follow-through remains limited, the market could shift into a range-bound consolidation pattern.
Table 1 Comparison of daily propylene output and capacity utilization in Shandong (10 kt, %)
| Item | Aug 10 | Aug 17 | Change | % Change |
|---|---|---|---|---|
| Daily output | 3.27 | 3.10 | -0.17 | -5.20% |
| Daily capacity utilization | 65.3% | 60.7% | -4.6 pp | — |
Data source: Chempricehub
Table 2 Dynamics of selected propylene units in Shandong (10 kt/y, 10 kt)
| Region | Company | Process | Capacity | Status | Output change (8.10–8.16) | Output change outlook (8.17–8.23) |
|---|---|---|---|---|---|---|
| Shandong | Levima New Materials | MTO | 22 | Shut down Jul 19, 2026; restarted Aug 15 | +0.13 | +0.36 |
| Shandong | Lijin Refining & Chemical | FCC + light hydrocarbon | 27 | Shut down Aug 15, 2026; ~30 days | -0.16 | -0.57 |
| Shandong | A major coastal plant | PDH | 75 | Shut down Aug 15, 2026; ~10 days | -0.45 | -1.58 |
| Total | 124 | -0.48 | -1.79 |
Data source: Chempricehub
This week, propylene unit maintenance and restarts coexisted in Shandong, with the supply side showing a mixed picture. Levima New Materials' MTO unit completed its restart, bringing a certain output increase, but Lijin Refining & Chemical and the major coastal plant's PDH unit were simultaneously taken off-line for maintenance. The output loss from these shutdowns outweighed the restart gains, pulling down the region's overall supply.
Data show that from August 10 to 17, daily propylene output in Shandong fell from 32,700 tons to 31,000 tons, down 1,700 tons, or 5.20%. Daily capacity utilization slipped from 65.3% to 60.7%, down 4.6 percentage points, indicating a marked decline in regional operating rates.
In other regions, Sierbang and Ningbo Kingfa units in East China remained shut down, while Donghua Energy and Satellite Petrochemical units completed restarts, adding supply to the East China market. In addition, port closures caused by earlier typhoon disruptions have been lifted, and cross-regional cargo transfer activity has moderated.
Shipment data from Shandong propylene sample enterprises show that shipments rose from 4,250 tons on August 10 to 5,800 tons on August 17, a notable increase. This reflects improved actual transaction and cargo turnover activity, indicating a phased recovery in downstream demand.
Table 3 Changes at selected downstream units in Shandong (10 kt/y, 10 kt)
| Region | Company | Product | Capacity | Status | Theoretical demand change (8.10–8.16) | Short-term demand change (8.17–8.23) |
|---|---|---|---|---|---|---|
| Shandong | Qixiang Tengda | PO | 30 | Shut down Jun 15, 2026; restart expected Aug 20 | -0.22 | +0.12 |
| Shandong | Levima New Materials | PO | 30 | Shut down Jul 11, 2026; restart expected Aug 19 | -0.37 | +0.27 |
| Shandong | Shandong Lihuayi | Butanol/octanol | 26 | Shut down Aug 17, 2026; ~15–20 days | — | -0.33 |
| Shandong | Shandong Kairi | PP | 6 | Shut down Aug 15, 2026; restart TBD | -0.04 | -0.13 |
| Shandong | Weifang Shufukang | PP | 15 | Shut down Aug 13, 2026; restart TBD | -0.14 | -0.25 |
| Shandong | Tianchen Qixiang | Acrylonitrile | 13 | Shut down Jul 1, 2026; restart expected Aug 20 | -0.29 | +0.16 |
| Shandong | A major coastal plant | Phenol/acetone | 75 | Shut down Aug 10, 2026; ~45 days | -0.44 | -0.44 |
| Shandong | A major coastal plant | n-Butanol | 30 | Shut down Aug 11, 2026; restart TBD | -0.45 | -0.52 |
| Shandong | A major coastal plant | PO | 40 | Shut down Aug 15, 2026; restart TBD | -0.18 | -0.64 |
| Total | 176 | -2.13 | -1.76 |
Note: These figures are theoretical values calculated based on product output and unit consumption, and are provided for trend reference only.
Looking at downstream operations, Shandong's downstream units showed a combination of restarts and new shutdowns this week. Qixiang Tengda's PO unit, Levima New Materials' PO unit, and Tianchen Qixiang's acrylonitrile unit are scheduled to restart successively on August 19–20, adding some propylene demand. At the same time, multiple units were taken off-line for concentrated maintenance—including Shandong Lihuayi's butanol/octanol unit, Shandong Kairi's and Weifang Shufukang's PP units, and the major coastal plant's phenol/acetone, n-butanol, and PO units—resulting in significant demand reduction. However, Qixiang Tengda, Lihuayi, and the major coastal plant all operate integrated complexes. While certain downstream units are under maintenance, their other downstream production units remain in operation, generating intermittent external propylene procurement demand and providing some support to the spot market.
Near term: Market to remain firm, with room to probe higher
On the cost side, international crude oil prices continue to climb, providing underlying support for propylene. On the supply side, maintenance at Shandong's PDH and refinery units has tightened supply, while the units' own downstream integration cannot fully cover the shortfall, creating periodic external procurement demand. Combined with trade delivery orders underpinning the market, the propylene price is expected to return to the 8,700–8,800 yuan/ton high.
Medium term: Supply-demand rebalancing; range-bound consolidation
Restarts of units currently under maintenance are expected to gradually ease the tight supply situation. At the same time, if international crude oil prices retreat from highs, cost-side support will weaken. If downstream processing margins fail to recover, end-user procurement follow-through will be constrained. With long and short factors pulling in opposite directions, the propylene market is likely to enter a range-bound consolidation phase.
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