In H1, 2020, propylene market prices showed a V-shaped trend, and the price fluctuation was large. Both the highest price and the lowest one appeared in April. As of June 30, mainstream market prices of propylene in Shandong were RMB 6,800/mt-6,850/mt, up 1.87% from the beginning of 2020. The average price of propylene in H1, 2020 was RMB 6,411.10/mt, down 12.60% Y-O-Y.
In Q1, 2020, propylene market prices showed a downward trend. The average price of propylene in Shandong was RMB 6,430.69/mt, down 14.67% Y-O-Y. The public health event hindered the transportation and logistics, and the export of end products was also inhibited. The inventory of the propylene industry chain was consumed slowly digested, and the inventory of various products was high, so the operating rates of upstream and downstream units declined synchronously. In addition, the international crude oil price plummeted, and WTI price fell into a historical negative value. Prices of propane and methanol also crashed. The decline in cost had bearish influence on the propylene market, causing mainstream market prices of propylene to continuously go down.
In Q2, 2020, propylene market prices showed an upward trend. The average price of propylene in Shandong was RMB 6,391.51/mt, down 10.41% Y-O-Y. The international crude oil price fluctuated upwards, supporting the propylene market. The public health event at home and abroad caused the demand for masks and other epidemic prevention materials. The demand for PP fiber surged due to the application in masks, which caused propylene market prices to rise sharply. The main downstream PP prices increased noticeably, and the role in driving the propylene market expanded rapidly. In the middle of April, propylene prices in Shandong went up fast with a range of RMB 1,000/mt, so prices of other related upstream and downstream products also soared. Then, propylene prices fell back in the later stage due to insufficient demand. However, the price change of downstream products was lagging, so the profits grew rapidly. Since then, with the continuous recovery of end demand, the profitability of propylene downstream products has been generally good, and the operating rates of downstream units remained high. The good demand formed a strong support for the rise in propylene market prices.
