Asian Propylene Market Strengthens Further on Robust Demand and Rising Costs

Asian propylene prices continued to move higher this week, supported by rising crude oil and propane costs, while strong trading activity emerged across China and Southeast Asia. Major traders were reported to have purchased cargoes at higher levels to cover supply shortfalls for contract customers requiring deliveries in late August and early September.

Crude oil prices climbed above $90/bbl as tensions between the US and Iran intensified and shipping through the Strait of Hormuz slowed. Hopes for a breakthrough between the two countries weakened, while lower tanker traffic through the Strait added to geopolitical concerns. According to Kpler data, tanker movements fell below the 10-day average of 11 commodity vessels entering or leaving the Persian Gulf through the Strait of Hormuz. October Brent futures settled at $91.62/bbl on Wednesday.

Higher crude prices also pushed Asian feedstock values upward. Naphtha increased to $811/ton CFR Japan on Tuesday from $809/ton a week earlier, while propane rose to $728/ton CFR Japan from $719/ton during the same period. Market sources noted that key Japanese traders had covered part of their late-August and early-September supply requirements, although fixed-price offers remained limited and formula-based offers sought higher premiums to CFR Asia assessments.

Propylene Price Update

CFR China
Current Price: $1,100/ton
Weekly Change: ▲ $20/ton
Bid Range: $1,050-1,070/ton
Offer Range: $1,160-1,200/ton

CFR Southeast Asia
Current Price: $1,100/ton
Weekly Change: ▲ $10/ton
Bid Range: $1,050-1,070/ton
Offer Range: $1,160-1,200/ton

Northeast Asia Prices Continue to Rise

Propylene prices in Northeast Asia and China extended their upward movement as demand increased and domestic inventories in China declined. Chinese traders continued seeking spot cargoes to cover shortages for late-August and early-September deliveries to contract customers.

Rising crude and higher propane costs lifted offers to $1,150-1,200/ton CFR China, while bids for prompt cargoes also strengthened. An East China end user was reported to have purchased a prompt August cargo at $1,100/ton CFR East China, while Wanhua Chemical was heard indicating a bid of $1,080-1,090/ton CFR Yantai for August delivery.

By Tuesday, both bids and offers moved higher alongside stronger October crude futures and firmer domestic propylene prices in China. Offers exceeded $1,150/ton CFR China main ports, while bids increased to $1,070-1,080/ton CFR East China. Another transaction with a Shandong trader was reported at $1,100-1,110/ton CFR East China.

Shandong propylene prices increased by CNY200-300/ton to CNY8,700-8,900/ton, while Sinopec raised its price by CNY250/ton to CNY8,750/ton. September Zhengzhou propylene futures also gained CNY133/ton on Wednesday, settling at CNY8,460/ton.

Offer indications for mixed South Korean and ASEAN cargoes stood at $1,150-1,200/ton CFR Northeast Asia/China. Fixed-price bids from traders were heard at $1,090-1,100/ton CFR Northeast Asia/China, while formula-based bids were reported at premiums of $20-25/ton to Northeast Asia assessments for early-September delivery into major Chinese ports.

China's PDH operating rate slipped to 68% this week as several plants entered maintenance. Oriental Energy shut its 660,000 tons/year Ningbo PDH plant in mid-August, while Zhejiang Satellite Petrochemical also shut its 450,000 tons/year PDH unit for maintenance during the same period.

Propylene availability across Northeast Asia is expected to tighten further in September and through the third quarter, with several South Korean crackers scheduled for maintenance. Lower cracker and PDH operating rates across the region, driven by feedstock security concerns and industry rationalization, are also expected to restrict supply.

Northeast Asia Plant Updates

Wanhua Chemical – Yantai, China
Capacity: 0.90 million tons/year propylene
Unit: PDH Plant
Status: Operating rate reduced to 70% due to margin concerns; restarted in early August.

Quanzhou Guoheng PC – Quanzhou, China
Capacity: 0.66 million tons/year propylene
Unit: PDH Plant
Status: Shut in early August; no confirmed restart date.

Fujian Refining & Petrochemical (FREP) – Fuzhou, China
Capacity: 0.50 million tons/year propylene
Unit: PDH Plant
Status: Operating rate reduced to 70% due to feedstock concerns.

Zhejiang Xingxing Petrochemical – Jiaxing, China
Capacity: 0.39 million tons/year propylene
Unit: MTO Plant
Status: Shut since early 2026; no confirmed restart date.

Zhejiang Petrochemical – Zhoushan, China
Capacity: 0.70 million tons/year propylene
Unit: PDH Plant
Status: Operating rate reduced to 80% due to feedstock concerns.

Oriental Energy Ningbo Fortune – Ningbo, China
Capacity: 0.66 million tons/year propylene
Unit: PDH Plant
Status: Shut from mid-August; restart expected in September.

Sinopec Zhongke Petrochemical – Zhanjiang, China
Capacity: 0.40 million tons/year propylene
Unit: PDH Plant
Status: Operating rate reduced to 70-80% due to feedstock concerns.

Zhejiang Satellite Petrochemical – Pinghu, China
Capacity: 0.45 million tons/year propylene
Unit: PDH Plant
Status: Shut from mid-August; restart expected in September.

Southeast Asian Prices Edge Higher on Tight Supply

Propylene prices in Southeast Asia also remained on an upward trend, supported by stronger Northeast Asian values, robust regional demand and reduced spot availability. Prices had already increased by $40/ton last week and added another $10/ton this week, bringing the total gain to $50/ton, or nearly 5%.

Market participants said ongoing Middle East tensions, disruptions around the Strait of Hormuz, volatile crude prices and higher feedstock costs are likely to continue supporting both propylene and ethylene markets in the near term.

Purchasing activity from major Japanese traders to cover August and early-September supply gaps has supported prompt spot prices and is expected to continue underpinning September values alongside the stronger energy market.

Propane at $728/ton CFR Japan, combined with around $250/ton in production costs, puts the estimated propylene breakeven level near $978/ton. With CFR Northeast Asia and Southeast Asia prices currently around $1,100/ton, production economics have improved after months of weak margins. Although higher profitability could encourage increased cracker and PDH operating rates, concerns over feedstock security are continuing to limit significant operating rate increases.

In formula-based negotiations, buying ideas were reported at premiums of $10-15/ton to CFR Southeast Asia assessments, while sell indications stood at premiums of $20-30/ton.

Regional supply in Southeast Asia is expected to remain tight through August and September. Malaysia's PRefChem restarted its two 70,000 bbl/day RFCC units in late July, while its 1.29 million tons/year Pengerang cracker was operating at around 60-70%.

Thailand's Rayong Olefins has kept its 900,000 tons/year Map Ta Phut cracker shut since early March, with a tentative restart expected in September. Singapore's Aster Chemicals & Energy has been operating its 1.15 million tons/year Pulau Bukom cracker at 50-60%, but the unit is scheduled for a one-month maintenance shutdown in August.

PT Lotte Chemical Indonesia has reduced the operating rate of its 1 million tons/year Cilegon cracker to 50-55% because of feedstock concerns, while ExxonMobil's older 900,000 tons/year Jurong cracker has remained shut since March.

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