Asia Propylene Extends Losses as Supply Builds and Demand Remains Weak

Asian propylene prices continued to decline for the eighth straight week across Northeast Asia and Southeast Asia, pressured by growing inventories, increasing regional supply, and weak downstream consumption. Market participants remain focused on China's rising stock levels as higher operating rates at PDH units and the restart of major production facilities are expected to add further supply during the coming months.

Regional Prices Continue to Ease

Recent market assessments showed propylene prices falling by another $20/ton across both key Asian markets.

Latest Market Levels:

CFR China: $1160/ton (down $20/ton week-on-week)
CFR Southeast Asia: $1180/ton (down $20/ton week-on-week)
China bid indications: $1140-1150/ton
China offer indications: $1250-1300/ton
Southeast Asia bid indications: $1140-1150/ton
Southeast Asia offer indications: $1240-1280/ton
Southeast Asia Faces Growing Supply Pressure

Southeast Asian propylene prices have now dropped about $320/ton from the highs recorded in early April, representing a decline of roughly 22%.

The market is preparing for additional supply as several major production units return to operation. Malaysia's PRefChem has restarted its crude distillation unit and is expected to bring its Pengerang cracker and RFCC facilities back online by mid-June. These restarts are likely to increase spot availability throughout June, July, and August.

Additional supply is also expected from other regional producers as maintenance outages conclude. Market participants believe the increase in available volumes will continue to pressure prices despite ongoing uncertainty surrounding Middle East shipping routes.

Recent spot activity showed fresh cargoes being offered for late-June loading, while transaction levels for Indonesia-bound cargoes were reported around $1170-1190/ton CFR.

Chinese Inventories Weigh on Northeast Asia

In Northeast Asia, propylene prices have fallen nearly 16% from their April peak as rising inventories continue to weigh on sentiment.

Chinese supply has expanded following the restart of several major PDH facilities. Operating rates at Chinese PDH plants have climbed to nearly 60%, adding significant volumes to the domestic market. Major facilities operated by Qingdao Jinneng and Wanhua Petrochemical resumed production in late May, further increasing supply availability.

Domestic Chinese producers have continued to place prompt cargoes into the market, while local prices have remained relatively stable despite the additional supply.

Regional Outages Unable to Offset New Supply

Although some production disruptions remain in place across the region, they have not been sufficient to balance the growing supply picture.

In Taiwan, refinery and cracker outages continue following operational issues and fire-related disruptions. Several key units remain offline and are expected to stay shut through June or possibly July.

However, market participants noted that the additional volumes generated by restarting Chinese PDH plants have more than compensated for these losses, keeping overall supply conditions comfortable and limiting any meaningful price recovery.

Outlook Remains Bearish

Market sentiment remains cautious as weak demand continues to coincide with increasing supply availability. With major Southeast Asian production units preparing to restart and Chinese inventories remaining elevated, traders expect pressure on spot propylene prices to persist in the near term.

Unless downstream demand improves significantly or unexpected supply disruptions emerge, the market is likely to remain under downward pressure through the summer months.

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