Introduction: This week, China's domestic propylene market continued its upward trajectory, driven by both macroeconomic sentiment and supply-demand fundamentals, with feedstock prices rallying strongly. Meanwhile, the downstream acrylic acid market followed suit passively on cost support, but its gains fell far short of the feedstock side, significantly narrowing industry profit margins and further deepening the profit distribution imbalance across the supply chain.
Domestic spot propylene prices extended their upward trend this week. Higher international crude oil prices provided solid cost-side support, while a temporary tightening in supply emerged as the core driver of this rally. Multiple PDH units, including those of Tianhong, Satellite, and Donghua Ningbo, were successively taken offline; combined with the restart of Bohua Development's PP plant, spot supply tightened simultaneously in North China and East China. Following the shutdown of several PDH units in East China, truck-transported supply became constrained, significantly lifting market sentiment and prompting major refineries to raise their offers accordingly. In addition, sustained US-Iran geopolitical tensions and unclear prospects for the reopening of the Strait of Hormuz further amplified concerns over potential supply disruptions, with stronger olefin feedstock costs underpinning the upward price movement. In terms of price performance, as of August 13, the mainstream propylene transaction price in Shandong stood at 8,600 yuan/ton, up 5.98% week-on-week; the mainstream price in East China reached 8,750 yuan/ton, up 2.94% week-on-week.
The strong rally in feedstock propylene further intensified cost pressures on acrylic acid plants. This week, the East China acrylic acid market held steady with a firm tone, with mainstream spot offers ranging between 7,000 and 7,250 yuan/ton, up 90 yuan/ton from the previous week — a week-on-week increase of just 1.28%. Compared with propylene's nearly 6% weekly gain, acrylic acid's upward adjustment was clearly insufficient, reflecting poor cost pass-through along the chain. On the supply side, Formosa Ningbo's unit operated at reduced rates during the week, narrowing the industry's capacity utilization. On the demand side, downstream specialty ester and SAP plants mainly drew down contract volumes and inventories, with only limited rigid demand following up cautiously, and actual deal negotiations inching up within a narrow range.
With propylene prices continuing to climb while acrylic acid price gains remained limited, profit margins across the supply chain were steadily compressed. According to Chempricehub data, as of August 6, the average weekly profit for acrylic acid stood at 170.49 yuan/ton, down sharply by 63.14% week-on-week, with production costs having risen to 6,879.5 yuan/ton. Entering mid-August, acrylic acid production margins narrowed further, falling to -63 yuan/ton by August 13.
Looking ahead to next week, the East China acrylic acid market is expected to maintain its steady-to-firm tone. On the feedstock front, the propylene market is likely to fluctuate within a range, with cost-side support remaining intact. As acrylic acid prices are currently hovering near the cost line, producers and traders show little willingness to offer discounts, keeping their quoting strategies relatively flexible. Meanwhile, downstream buyers' inquiry activity has picked up somewhat. Taken together, acrylic acid prices are expected to largely consolidate next week, with the price center likely edging slightly higher.
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