SunSirs: Propylene Consolidated at High Levels: the 'Tug of War' Amidst a Supply-Demand Stalemate

Market Trends Overview

The propylene market remained stable this week. As of April 2, the benchmark price for propylene—as tracked by SunSirs—stood at 8,784.33 RMB/ton, holding steady with the level seen at the beginning of the month and exhibiting a typical pattern of "high-level fluctuation."

Market analysis

Behind this "high-level consolidation" lay, in reality, an intense tug-of-war between supply and demand.

Supply Side: Refinery operations remain relatively stable. Although some maintenance was anticipated, overall supply had not experienced a precipitous decline; product availability remained relatively ample, thereby curbing the impulse for prices to surge further. 

Demand Side: Downstream derivative—such as polypropylene (PP) performed tepidly. Procurement of the raw material, propylene, remained largely limited to meeting immediate operational needs, with no signs of a widespread stockpiling trend.

In short: Upstream players demonstrated a strong resolve to support prices, while downstream buyers showed little willingness to accept shipments, resulting in a standoff between the two parties.

Market Outlook

Overall, the interplay between supply and demand in the propylene market is expected to persist in the short term; prices are highly likely to maintain a pattern of high-level fluctuation, trading within a range of 8,500 to 9,200 RMB/ton. In the medium term, as incremental supply gradually comes online—and barring any significant improvement in demand—the market's upward momentum will gradually wane; consequently, vigilance is required regarding the risk of a price correction. Moving forward, key factors to monitor include trends in international crude oil prices, changes in operating rates at downstream facilities, and overall market trading activity.

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