Introduction: This week, the domestic propylene market initiated a new round of recovery. Supported by improved supply-demand dynamics and strengthening costs, the market trended warmer again. As of September 14, the mainstream average price in Shandong was RMB 9,685/ton, up 7.13% from September 4. Looking ahead, the expectation of reduced supply is gradually materializing, maintaining an overall bullish trend with prices potentially testing the RMB 9,800–10,200/ton range. However, if prices continue to surge, cost pressures on downstream sectors will accumulate rapidly, increasing the risk of negative feedback. The market may lack momentum for further gains and face risks of a sharp decline.
| Sept 14 | Sept 7 | Difference | MoM Change | |
|---|---|---|---|---|
| Daily Output (10k tons) | 3.38 | 3.47 | -0.09 | -2.59% |
| Daily Capacity Utilization (%) | 66.1% | 67.9% | -1.8% |
Data Source: Chempricehub
| Enterprise | Process | Capacity (10k t/a) | Status | Output Change (Sept 7-13) (10k tons) | Commodity Volume Trend (Sept 14-20) (10k tons) |
|---|---|---|---|---|---|
| Qixiang Tengda | Mixed Alkane Dehydrogenation | 42 | Stopped July 7, 2026; Restarted Sept 6 | 0.47 | 0.53 |
| Lijin Refining & Chemical | Light Hydrocarbon Cracking | 15 | Stopped Aug 15, 2026; Restarted Sept 14 | - | 0.25 |
| Lijin Refining & Chemical | Fluid Catalytic Cracking (FCC) | 12 | Stopped Aug 15, 2026 | - | 0.13 |
| Lianhong New Materials | MTO | 22 | Stopped Sept 12, 2026; Expected duration half a month | -0.11 | -0.39 |
| Zhenhua Petroleum | PDH | 75 | Recent shutdown plan | - | -0.68 |
| Total | 166 | 0.36 | -0.16 |
Data Source: Chempricehub
This week, the Shandong propylene market saw both start-ups and shut-downs among operating units. After completing its restart, Qixiang Tengda’s mixed alkane dehydrogenation unit continued to increase load, and Lijin Refining & Chemical’s light hydrocarbon cracking unit resumed production, adding some volume to the market. Meanwhile, Lianhong New Materials’ MTO unit entered maintenance, and Zhenhua Petroleum’s PDH unit has a recent shutdown plan, creating mixed signals in regional unit changes.
In terms of output data, from September 7 to September 14, Shandong’s daily propylene output fell from 34,700 tons to 33,800 tons, a decrease of 900 tons or 2.59% week-on-week. Daily capacity utilization dropped from 67.9% to 66.1%, a decline of 1.8 percentage points, indicating a slight weakening in overall regional operating levels.
Looking ahead, while Lijin Refining & Chemical’s FCC unit is expected to restart, the incremental space is relatively limited. Zhenhua Petroleum’s upcoming shutdown will bring a significant reduction, Lianhong New Materials remains stopped, and the restart progress of units like Luxi Chemical still faces uncertainty. Comprehensive calculations suggest that the supply contraction in Shandong propylene will further materialize. The estimated weekly output is 232,600 tons, a 3.33% drop compared to the previous statistical period (Sept 7-13). In the short term, the expectation of reduced spot supply provides support to the market.
This period, propane feedstock prices rebounded, but the propylene market maintained strength. PDH units retained healthy profitability, with margins rising 38% compared to September 7. Downstream derivatives showed clear divergence: PP powder profits continued to narrow, dropping 1,450% compared to September 7; acrylonitrile profits fell 113% due to weak product prices and high propylene costs; only propylene oxide (PO) saw price rallies, with profits rebounding 265%. Overall, despite divergent downstream profitability, the industry maintains relatively stable essential demand for propylene feedstock.
| Region | Enterprise | Product | Capacity (10k t/a) | Status | Theoretical Demand (Sept 7-13) (10k tons) | Short-term Demand Change (Sept 14-20) (10k tons) |
|---|---|---|---|---|---|---|
| Shandong | Qixiang Tengda | PO | 30 | Stopped June 15, 2026; Restarting | - | 0.09 |
| Shandong | Shandong Liuhua Yi | Butanol/Octanol | 26 | Stopped Aug 17, 2026; Restarted Sept 10 | 0.26 | 0.33 |
| Shandong | Shandong Kairi | PP Powder | 6 | Stopped Aug 15, 2026; Restarted Sept 8 | 0.08 | 0.09 |
| Shandong | Dongming Petrochemical | PP | 20 | Stopped Sept 11, 2026; Restarted Sept 13 | -0.11 | 0.38 |
| Shandong | Yulong Petrochemical | PP | 40 | Stopped Sept 10, 2026; Restarted Sept 11 | -0.11 | 0.76 |
| Shandong | Lianhong New Materials | PP | 20 | Stopped Sept 14, 2026; Expected duration half a month | - | -0.38 |
| Shandong | A Major Plant in Weifang | PP | 15 | Stopped Sept 14, 2026; Recovery time TBD | - | -0.25 |
| Shandong | Shandong Fuyu | Phenol/Acetone | 25 | Stopped Aug 17, 2026; Expected restart around Sept 17 | - | 0.09 |
| Total | 182 | 0.12 | 1.11 |
Note: These figures are theoretical values calculated based on product output and unit consumption, intended only as trend references.
Regarding downstream units, this week in Shandong, Liuhua Yi’s butanol/octanol and Kairi’s PP powder units restarted, while Dongming Petrochemical and Yulong Petrochemical’s PP units experienced short-term shutdowns. This resulted in a theoretical increase in propylene demand of 1,200 tons, with other downstream units operating steadily. Subsequently, with planned restarts for Qixiang Tengda’s PO and Fuyu’s phenol/acetone units, alongside shutdowns at Lianhong New Materials and the major Weifang plant, and gradual load increases from previously restarted units, the total theoretical increase in short-term propylene demand is estimated at 11,100 tons. There is an expectation for further improvement in downstream procurement demand. However, actual load-up progress and changes in product profitability will influence real feedstock consumption, so the pace of demand release requires continuous monitoring.
From the perspective of the spread between the main downstream product, PP powder, and propylene, the gap fluctuated little this period, remaining largely near RMB 450/ton. If processing spreads fail to recover significantly in the future, the production enthusiasm of PP powder manufacturers will be dampened, posing a risk of further declines in operating loads. Simultaneously, if integrated enterprises face worsening processing losses, their willingness to sell surplus propylene externally may increase. This rise in commodity supply would, to some extent, cap the upward potential of propylene prices.
Cost Side: Geopolitical risks in the Middle East have escalated, with disruptions to Saudi crude oil pipeline transport and Houthi pressure on Red Sea shipping lanes intensifying supply disturbances. This has raised market risk premiums, driving up propane and naphtha prices and providing cost support for propylene. However, geopolitical situations remain volatile; pipeline repairs and changes in shipping conditions could amplify raw material price fluctuations, introducing uncertainty into propylene’s cost support.
Supply Side: While there are some incremental supplies in the regional market, the overall expectation of volume reduction is pronounced, supporting spot prices. However, risks associated with increased external sales of propylene from certain integrated units must still be monitored.
Demand Side: Downstream restarts are boosting theoretical demand, but weak profitability in products like PP powder clearly constrains actual demand release.
Comprehensive View: In the short term, the expectation of supply contraction is gradually materializing, with supply factors becoming the primary driver of market trends. Combined with supportive essential downstream demand, the market maintains an overall bullish pattern, with prices potentially testing the RMB 9,800–10,200/ton range. However, if prices continue to surge, rapid accumulation of cost pressure on downstream sectors will elevate negative feedback risks. With insufficient momentum for further price hikes, the market faces risks of a sharp downturn.
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