Asian Propylene Prices Cross $1,200/ton as Supply Tightness Extends Rally

Asian propylene markets continued their upward movement for a sixth straight week, with spot prices moving above the $1,200/ton mark in both China and Southeast Asia. Tight spot availability, active trading interest and higher crude and propane costs encouraged traders to secure cargoes for October requirements.

Crude remained an important source of support despite losing some momentum later in the week. November Brent futures moved from $105.68/bbl on Monday to $108.75/bbl on Tuesday, before easing to $105.83/bbl on Wednesday and $104.82/bbl on Thursday. Although the decline interrupted the earlier rise, Brent stayed above $100/bbl, keeping upstream costs elevated. A prolonged drop in crude could eventually reduce pressure on downstream feedstock prices.

Feedstock costs also strengthened. Asian naphtha reached $965/ton CFR Japan on Wednesday, up 7.8% from $895/ton a week earlier and 21% from $797/ton two weeks earlier. Propane climbed to $904/ton CFR Japan, gaining $27/ton (3.1%) on the week and $108/ton (13.5%) over two weeks.

Propylene Price Snapshot

CFR China
Price: $1,230/ton
Change: +$30/ton
Bid Range: $1,190–1,210/ton
Offer Range: $1,270–1,300/ton

CFR Southeast Asia
Price: $1,220/ton
Change: +$30/ton
Bid Range: $1,180–1,200/ton
Offer Range: $1,270–1,300/ton

Northeast Asia Extends Gains on October Buying

Northeast Asian propylene prices increased by another $30/ton, extending the rally into a sixth consecutive week. Traders continued sourcing spot cargoes for October requirements in China and South Korea as availability tightened and feedstock costs remained high.

Bids on a CFR China basis moved from the mid-$1,100s at the beginning of the week to $1,200/ton and above, while traders were heard securing October cargoes from Taiwan and South Korea.

Formosa Petrochemical was reportedly heard to have sold around 20,000 tons of October-loading propylene to four trading companies through a tender. The cargoes were awarded under a floating-price formula linked to CFR NEA assessments on an FOB Taiwan basis, with a freight discount.

A South Korean producer was also reported to have sold an estimated 10,000–14,000 tons for October loading under a floating-price formula linked to CFR NEA assessments on an FOB Korea basis.

Offers for South Korean cargoes were heard at $1,250–1,300/ton CFR NEA/China, while fixed-price bids stood around $1,190–1,200/ton. Formula-based bids were also heard at discounts of $40–50/ton to NEA assessments on an FOB South Korea basis.

China’s domestic market strengthened sharply alongside import prices as buying activity increased and supply tightened in Shandong and East China. Several traders reportedly purchased both domestic and imported material.

Sinopec raised its propylene price by CNY1,150/ton to CNY10,100/ton, while spot prices in East China and Shandong increased by approximately CNY1,100–1,150/ton to CNY9,900–10,100/ton.

China’s PDH operating rate edged up to around 75% following several plant restarts. Wanhua Chemical restarted its 750,000 tons/year PDH unit in early September, Jiangsu Shenghong resumed its 700,000 tons/year unit after two months of maintenance, and Liaoning Kingfa restarted its 600,000 tons/year PDH unit on September 6.

Despite these restarts, Northeast Asian propylene availability is expected to remain tight into October and much of Q4. LG Chem plans to shut its 1.3 million tons/year cracker in mid-October for around 45 days, while KPIC is expected to take its 800,000 tons/year cracker offline for approximately 40 days from mid-October. KPIC is currently operating at around 65%.

Propylene availability in Japan has also remained restricted because of lower operating rates and RFCC maintenance.

Southeast Asia Follows Higher on Limited Spot Supply

Southeast Asian propylene prices also rose for a sixth consecutive week, gaining approximately $30/ton as the region followed Northeast Asia higher. Limited spot inventories, stronger trading activity and rising propane costs continued to support the market.

ExxonMobil Singapore was reportedly heard to have purchased a 7,000-ton Taiwan-origin cargo at around $1,200/ton CFR Singapore for October arrival.

In floating-price negotiations, buying ideas increased to premiums of $30–35/ton over CFR SEA assessments on a CFR SEA basis. Selling indications were heard at discounts of $35–45/ton to CFR SEA assessments on an FOB Southeast Asia basis.

Traders said lower operating rates at regional crackers and PDH units have significantly reduced spot availability. This is expected to keep near-term offers elevated, although the recent decline in crude prices remains a factor to monitor.

At the same time, increasingly weak downstream margins could limit further gains. A Malaysian trader noted that the widening gap between feedstock costs and downstream polymer and derivative prices—including acrylonitrile, cumene and isopropanol—has created an increasingly difficult margin environment.

Regional Supply Remains Under Pressure

Southeast Asian cracker operating rates remain reduced as producers balance feedstock availability with margin pressures.

Malaysia’s PRefChem is reportedly operating its 1.29 million tons/year Pengerang cracker at around 60–70%. Rayong Olefins’ 900,000 tons/year Map Ta Phut cracker has remained shut since early March, with a tentative September restart previously targeted.

Aster Chemicals & Energy continues to operate its 1.15 million tons/year Pulau Bukom cracker at around 50–60%, while PT Lotte Chemical Indonesia has reduced operating rates at its 1 million tons/year Cilegon cracker to 50–55% because of feedstock concerns.

ExxonMobil’s older 900,000 tons/year Jurong cracker has also remained shut since March.

With supply expected to stay restricted into October, propylene prices retain upward support from limited spot availability and elevated feedstock costs. However, the recent crude retreat and increasingly stretched downstream margins could limit the pace of further increases.

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