In the China propylene market, supply in the Shandong area is increasing while demand for derivatives is sluggish. As a result, prices might soften going forward.

On the supply side, profitability is not secured at methanol-to-olefins (MTO) facilities and propane dehydrogenation (PDH) facilities. Therefore, these facilities are operating at low rates. Some petrochemical makers in East China were planning to postpone the restart after maintenance of PDH facilities or to shut down the facilities. For this reason, supply for propylene is perceived to be tight. On the other hand, in Shandong, some PDH facilities that had undergone maintenance restarted and supply is increasing.

On the demand side, some derivative polypropylene (powder grade) makers are decreasing operation rates toward the low demand season. Further, maintenance is taking place at many other derivative facilities and buying interest for propylene is receding. But many sources perceive that propylene prices might not fall sharply since prices for feedstocks including crude oil are staying high.