Asian Propylene Market Holds Firm as Energy Costs Keep Upward Pressure Intact

Asian propylene prices across Northeast and Southeast Asia remained largely stable this week after a strong two-week rally, as rising crude oil, naphtha, and propane costs continued to provide solid support. While spot trading activity slowed following recent gains, confidence in the forward market remained firm, reflected by another increase in China's September propylene futures.

Market sentiment continued to be influenced by developments in the energy complex. Crude oil prices extended their rally after renewed concerns emerged over Middle East shipping routes, particularly around the Bab el-Mandeb Strait and the Red Sea. These disruptions raised fears of tighter crude supply and strengthened cost support throughout the petrochemical chain.

At the same time, the price gap between propylene and ethylene narrowed further. Propylene values in Northeast Asia remained only slightly above ethylene levels, while sharply rising propane prices continued to improve production economics for propylene producers. Asian propane prices have climbed significantly over the past two weeks, reinforcing a stronger cost base for the market.

Propylene Price Snapshot

CFR China
Current Price: $960/ton
Weekly Change: Stable
Bid Range: $930–940/ton
Offer Range: $1,050–1,100/ton

CFR Southeast Asia
Current Price: $980/ton
Weekly Change: Stable
Bid Range: $950–960/ton
Offer Range: $1,050–1,100/ton

Southeast Asia enters consolidation phase

In Southeast Asia, propylene prices held steady despite continued strength in energy and feedstock markets. Market participants said the rapid gains seen in recent weeks have been followed by a consolidation phase, with buyers becoming more selective while producers continue to benefit from stronger forward pricing indicators.

The region also saw additional spot cargoes becoming available for August loading from several major producers. However, most discussions remained linked to floating-price formulas, limiting the impact of additional supply on market sentiment.

Supply is expected to improve slightly following the restart of several regional production units. Nevertheless, ongoing outages and feedstock-related shutdowns at multiple crackers across Southeast Asia continue to prevent any significant oversupply from emerging.

Northeast Asia pauses after recent rally

In Northeast Asia, propylene prices also stabilized after climbing sharply last week. Wider bid-offer gaps reduced spot trading activity as buyers became more cautious following the recent run-up in prices.

Chinese sellers maintained firm offer levels, supported by stronger domestic futures and higher local market prices. Several domestic producers increased propylene prices during the week, reflecting confidence in market fundamentals despite slower spot demand.

South Korean and Taiwanese market activity indicated that regional availability remains relatively tight. Higher propane costs and operational constraints have continued to pressure cracker and PDH economics, limiting production growth across parts of the region.

Although physical trading has slowed, market participants generally expect energy prices and feedstock developments to remain the key drivers of propylene pricing direction heading into September.

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