China Propylene Market Review and Forecast
Propylene is one of important petrochemical products and the basic feedstock for three major synthetic materials. There are many kinds of propylene production technologies and downstream applications, attracting a lot of market eyeballs. In 2023, the proportion of PDH capacity rose by 7% Y-O-Y. The PDH capacity expanded more rapidly, so the impacts on propylene market strengthened. Meanwhile, the proportion of propylene consumption in PP industry remained at 70% (PP granule 63%, PP powder 7%), and that in PO and 2-EH industries rose by 1% and declined by 1% Y-O-Y respectively. In recent year, the feedstock and downstream application of propylene became diversified. Besides, the feedstock became lighter, and the overall downstream application became more comprehensive.
Propylene Industrial Chain
It is estimated that China’s propylene prices will probably increase at first and then go down in the future. The stock replenishment in 2024 will probably give support to commodity market prices. Accordingly, the macro environment may exert bullish impacts on China’s propylene market. Moreover, the international crude oil prices are likely to go down and then increase, strongly supporting propylene prices. China’s propylene capacity may further expand, but it is predicted that the operating rate of the overall propylene industry may remain low. There may be intensive unit shutdown and restart, and enterprises will probably intend to influence propylene prices via adjusting unit operating rates. Besides, the demand for propylene is likely to improve, as there may be many newly added downstream projects. However, prices of downstream products and profits from producing downstream products may still underperform. There may be uncertainties in downstream demand recovery, and market participants also need to pay close attention to the macro environment.
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