Propylene is the core upstream raw material for polypropylene production, and the two form a closely linked industry chain. Entering June, high international oil prices provided cost support; however, most downstream chemical products derived from propylene fell into loss-making territory. Coupled with the fact that polypropylene's end-user demand has entered the traditional off-season, the two products have shown divergent market trends: polypropylene production profits remain relatively healthy with a firm spot market, whereas propylene prices continue to retreat due to downstream resistance to high costs.

I. Domestic Regional Spot Prices (as of June 9)

As of June 9, data monitored by SunSirs shows the following: the benchmark price for propylene stood at 8,824.33 RMB/ton, showing a slight intraday decline; it has fallen 3.39% cumulatively since the beginning of the month, with a total drop of 10.17% since early May. The price of polypropylene was 9,382 RMB/ton, fluctuating within a high range; its volatility was far lower than that of upstream propylene, resulting in a widening price spread between the upstream and downstream sectors.

Regionally, there are distinct price differences for propylene: Shandong, the largest domestic hub for propylene production and sales, saw mainstream ex-factory quotes of 8,750–8,820 RMB/ton, representing the lowest price point nationwide. In North and East China, transaction prices were 30–60 RMB/ton higher due to logistics and supply allocation factors. The South China market saw stable "just-in-time" demand, with quotes tracking fluctuations in East China; trading was dominated by small orders based on immediate needs, and traders actively lowered prices to stimulate transactions.

Regional trends for polypropylene were relatively uniform: mainstream transaction prices for "drawing-grade" (fiber-grade) polypropylene in East and North China ranged from 9,350 to 9,450 RMB/ton, with slight variations for film-grade and injection-molding-grade materials due to product differences. Arrival prices in South and Southwest China were slightly higher, with regional price differentials kept within 50 RMB/ton. The market presents a divergent pattern: propylene prices are trending downward due to weakness, while polypropylene prices remain stubbornly high.

II. Domestic Production, Port Inventories, and Supply Status

(A) Production Situation

Domestic propylene capacity is substantial, and new capacity continues to come online in an orderly manner. Meanwhile, units previously under maintenance are gradually restarting, leading to a steady recovery in the industry's overall operating rate. Total monthly production has seen a slight month-on-month increase, and overall market supply is easing. Although some PDH and coal-to-propylene units continue to operate at low loads, this has not altered the overarching trend of rising supply.

Regarding polypropylene, the industry's operating rate has dipped due to periodic unit maintenance, resulting in a slight month-on-month contraction in total output. Despite the decline in feedstock propylene prices, downstream enterprises lack the incentive to increase production during the off-season; instead, they are scheduling production based on orders and actual demand. Consequently, overall output remains stable, with no significant increase in volume.

(B) Inventory Situation

Social and port inventories of propylene are at moderate levels. As supplies increase following unit restarts, inventories in certain regions are slowly accumulating, further suppressing spot prices; there is ample cargo circulating at ports, with no signs of shortages.

The inventory profile for polypropylene is the opposite; the industry has seen continuous destocking over several weeks, with enterprise and port inventories falling to multi-year lows for this period. Tight circulating supply has become a key factor supporting high polypropylene prices. From a global supply perspective, overseas units are operating steadily. While international logistics have faced intermittent disruptions due to geopolitical tensions, there have been no widespread shortages of propylene or polypropylene globally, with only localized, short-term slowdowns in the flow of goods.

III. Domestic and International Demand Situation

(A) Propylene Demand

Propylene has a diverse range of downstream applications; beyond polypropylene, it is used to produce chemicals such as propylene oxide, octanol, and acrylic acid. Currently, with the exception of polypropylene, most downstream chemical sectors are facing inverted profit margins (production costs exceeding selling prices). Producers have very low tolerance for high-priced feedstock and limited willingness to purchase, restricting procurement to essential minimums—a primary factor dragging down propylene prices. Although polypropylene plants are operating normally—providing a solid floor for propylene prices—this single source of demand is insufficient to offset the weakness seen in other product categories.

(II) Polypropylene Demand

Downstream sectors for polypropylene—including woven plastics, BOPP film, injection molding, and non-woven fabrics—have fully entered the traditional off-season for consumption. Operating rates in the woven plastic and agricultural film industries are at annual lows, with sluggish follow-through on orders for daily-use packaging and foreign trade; downstream manufacturers generally employ a "just-in-time" procurement strategy with zero inventory, showing little willingness to stock up at high prices. Overseas demand remains stable, with routine orders from Southeast and South Asia proceeding steadily but without significant volume growth. Overall, baseline demand for polypropylene is stable but lacks upward momentum.

(III) Impact of the International Situation

Geopolitical tensions in the Middle East have caused intermittent fluctuations in international crude oil and propane prices, providing cost-side support to the entire olefin industry chain, though this has not resulted in a global disruption of raw material supplies. Overseas propylene and polypropylene plants are operating stably, import-export logistics are gradually recovering, and global supplies remain ample, preventing any regional or global shortages.

IV. Customs Import and Export Data for April 2026 (Year-on-Year and Month-on-Month)

(I) Propylene Imports and Exports

In April, domestic propylene imports totaled 106,400 tons, down 34.84% month-on-month and 26.57% year-on-year; this dual decline was primarily driven by the price spread between domestic and international markets and high price quotes for overseas supplies. The average import price rose by 25.35% month-on-month, reflecting increased overseas raw material costs. Propylene exports for the month stood at 21,100 tons—a massive month-on-month surge of 10,450% and a year-on-year increase of 520.59%. While export volumes climbed sharply, the average export price plummeted by 72.49% month-on-month, indicating significant price suppression by overseas buyers and underlying weakness in foreign demand. Cumulative imports from January to April totaled 615,900 tons, while cumulative exports reached 24,400 tons; the overall pattern shows "lower imports and higher exports," leading to a further easing of domestic supply .

(II) Polypropylene Imports and Exports

In April, the total volume of primary-form polypropylene imports was 205,000 tons, a year-on-year decrease of 27.37%; imports of both homopolymer and copolymer grades declined significantly, as geopolitical conflicts and an inverted price relationship between domestic and international markets dampened the incentive to import. Polypropylene exports for the month reached 639,400 tons, a sharp year-on-year increase of 123.52%; low-priced domestic supplies held an export advantage, making overseas sales a crucial channel for absorbing surplus capacity. Cumulative figures for January–April showed a year-on-year decline in imports and a substantial rise in exports, with this foreign trade pattern effectively balancing domestic supply and demand

V. Price Dynamics and Interconnectedness Along the Industry Chain

Propylene and polypropylene share a direct upstream-downstream relationship; as propylene is the sole core feedstock for polypropylene, their prices would typically move in tandem. However, a clear divergence has emerged at this stage, driven primarily by the redistribution of profits along the industry chain.

Upstream, international crude oil and propane prices remain high due to the situation in the Middle East, establishing a cost floor for propylene and limiting any significant price drops. Production costs for both oil-based and PDH-based propylene remain elevated; producers face mounting pressure from losses and show little willingness to sell at low prices.

In the midstream segment, the continuous decline in propylene prices has directly lowered polypropylene production costs. With polypropylene production profits currently in a relatively favorable range, producers are strongly inclined to maintain price levels and are reluctant to implement steep price cuts, even amidst weak downstream demand.

Downstream, various polypropylene products face a seasonal lull in end-user consumption, making it difficult to raise prices for finished goods; profit margins are being continuously squeezed, forcing manufacturers to respond by curtailing operating rates and reducing raw material procurement. Meanwhile, other chemical downstream sectors utilizing propylene are suffering even heavier losses, creating a negative feedback loop that compels propylene prices to retreat further.

The industry chain as a whole is characterized by upstream costs providing a floor, midstream profit divergence, and weak downstream demand; the transmission of prices between upstream and downstream segments has been disrupted, resulting in a continuously widening price spread. VI. Outlook and Forecast

Regarding propylene, domestic production units continue to resume operations, maintaining a loose supply landscape. Coupled with persistent losses in downstream chemical sectors—which keep procurement sluggish—propylene prices are expected to continue fluctuating within a weak range; however, cost support from crude oil and propane limits the potential for a sharp decline, with the prevailing trading range expected to be 8,700–8,950 RMB/ton.

Supported by low inventory levels and decent production margins, polypropylene prices are likely to consolidate at high levels; upside potential is constrained by off-season demand, leading to range-bound trading rather than a clear directional trend. As maintenance units fully resume operations and propylene supply increases further, prices face slight downward pressure; however, should downstream chemical margins recover and procurement demand for propylene pick up, prices could stabilize. For polypropylene specifically, the traditional off-season persists and downstream operating rates show little sign of significant recovery, so prices will likely remain range-bound pending a rebound in end-market orders.

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