In the first quarter of 2024, the domestic propylene market first increased, then fluctuated, and finally dropped significantly. Compared with the same period in 2023, the market price declined. The average price of the Shandong propylene market in the first quarter was 6,843 yuan per ton, a year - on - year decrease of approximately 7.04%.
In January, the propylene market bottomed out and rebounded. Firstly, PDH units in Shandong, North China, and Northeast China successively shut down, leading to a reduction in supply and the inflow from surrounding areas. Secondly, the Jingbo PP unit started operation, and some downstream enterprises stocked up before the festival. The demand followed up moderately, and the market transaction price increased.
From February to mid - March, there was a seesaw battle between bullish and bearish factors in terms of supply and demand, and the propylene market fluctuated. On the bearish side, firstly, downstream enterprises consumed the pre - stocked goods during the Spring Festival, and the trading was dull. Secondly, after the festival, the inventory of manufacturers increased, and the demand recovered slowly, putting pressure on the supply - demand balance. Thirdly, the shut - down units in North China and Shandong were gradually restarted, increasing the commodity volume, and more bearish news emerged. On the bullish side, the MTO unit of Luxi Chemical and the PDH unit of Lihuayi Weiyuan were shut down briefly in March. The factories increased their external procurement of propylene as raw materials. Coupled with the maintenance of large PDH plants in Shandong, there was a game between bullish and bearish factors in terms of supply, and the market price continued to fluctuate.
In March, the propylene market price declined. Due to the high inventory of some factories, the need for inventory clearance was urgent. Market participants competed to sell goods, and the quoted price dropped significantly. The downstream enterprises were cautious and remained on the sidelines, resulting in weak market transactions.
From April to mid - May, the domestic propylene market mainly fluctuated within a range. The price of propylene in Shandong was in the range of 6,580 - 6,970 yuan per ton, with an overall narrow fluctuation range and an amplitude of 5.93%.
Overall, in the second quarter, there were limited clear bullish and bearish signals in the fundamentals. The support from the supply side alternated between strong and weak, keeping the price mainly in a fluctuating state. From the perspective of the supply side, April - May was still the peak period of spring maintenance. At the same time, PDH maintenance and temporary shutdowns increased, significantly boosting the supply. However, from the perspective of the demand side, the support was average. With the arrival of summer, the downstream and end - user markets gradually entered the seasonal demand off - peak period. The downstream enterprises were cautious about chasing high prices, which restricted the upward movement of the propylene market. At the same time, the main process routes of propylene still remained in a loss - making situation. The support from the cost side also limited the downward space of the propylene market, resulting in a situation where the market had limited upward momentum and limited downward space.
From late May to early June, the propylene market stabilized and strengthened. The price of propylene in Shandong rose to a new high for the year, with an increase of 9.45%.
On the one hand, the PDH units of Hebei Haiwei, Jiangsu Ruiheng, Zhonghai Fine Chemical, Wanda Tianhong, and Huifeng Petrochemical were intensively under maintenance. Scheduled maintenance, sudden failures, economic shutdowns, and restart delays coexisted. At the same time, some new units under trial operation in Shandong were shut down, leading to a significant reduction in propylene supply. On the other hand, the performance of the demand side also improved. The PO units of some PDH - supporting downstream enterprises started operation, reducing the external sales of propylene. At the same time, the PDH unit of Wanhua Chemical was temporarily shut down, creating a demand for external procurement of raw materials. The supply - demand pattern tightened significantly.
From late June to early August, the propylene market fluctuated at a high level, and the price center of gravity slightly declined, with a decrease of 2.47%.
During this stage, there were limited clear fundamental guidelines, and there was a seesaw battle between bullish and bearish factors. The propylene market fluctuated narrowly at a high level. The supply - demand pattern fluctuated slightly, and the price trend was affected by the purchasing atmosphere and inventory changes. The bullish factors mainly came from the supply side. Some dehydrogenation units were affected by extreme weather, and the release of new production capacity was lower than expected. The second - phase project of Jineng Chemical was put into production, but the increase in commodity volume was limited. Zhonghai Fine Chemical and Jincheng Petrochemical continued to be shut down, providing good support. The bearish factors came from the demand side. On the one hand, propylene was at a stage - high level, and the downstream enterprises were cautious about chasing price increases. On the other hand, the downstream market was lackluster, and the cost pressure increased. Some of the main downstream units fluctuated, and some of the main downstream even sold raw material propylene externally.
From mid - August to September, new production capacity was released, and the commodity volume increased significantly. The propylene market declined weakly. The price of propylene in Shandong dropped from above 7,000 yuan per ton to below 6,500 yuan per ton, with a decrease of 8.16%.
During this stage, the propylene market was under pressure from multiple bearish factors, and the downward trend was hard to stop. The main bearish factors were as follows: Firstly, multiple economic and demand data were poor, and international crude oil continued to decline. In late September, due to the reduction in crude oil supply under the influence of tropical storms and the impact of the Federal Reserve's first interest rate cut, the oil market rebounded slightly. However, poor economic data in Europe and the United States still dragged down the oil market. Secondly, Zhenhua Petrochemical started production and shipping, significantly increasing the supply. Coupled with the influence of several holidays around September, production enterprises were more eager to ship goods. In late September, some previously shut - down units were restarted, and the overall supply was abundant. Thirdly, the characteristics of the peak demand season did not appear. The downstream enterprises had a small amount of stocking operations, but due to the sufficient supply of propylene, the downstream procurement attitude was cautious. They purchased on - demand at low prices, and the overall performance of terminal demand was dull.
In the fourth quarter, the propylene market bottomed out and rebounded, mainly fluctuating at a high level, and the amplitude continued to narrow. The price of propylene in Shandong returned above 7,000 yuan per ton.
During this stage, the bullish factors increased. Firstly, affected by the geopolitical situation, international crude oil prices rose continuously. Secondly, due to cost pressure, economic shutdowns increased significantly, and the shutdowns of main PDH and MTO units were concentrated. Thirdly, the restart of some PDH units that were planned to be restarted earlier was postponed. Two main PDH units in North China remained shut down, and the release of new propylene production capacity in the fourth quarter was limited. The new production capacity failed to meet the expected release of commodity propylene. Therefore, production enterprises were determined to hold prices, and the shipping rhythm was acceptable for most of the time in the fourth quarter.
