Asian Propylene Prices Recover After Three Months as Oil Strengthens

Asian propylene prices recorded their first weekly increase in nearly three months as higher crude oil prices and renewed geopolitical tensions in the Middle East improved market sentiment across Northeast and Southeast Asia. Rising futures, firmer spot offers, and stronger buying interest supported the recovery, although market participants remain uncertain whether the upward movement can be sustained without continued strength in energy markets.

The recovery was mainly driven by a sharp rise in crude oil after renewed US sanctions on Iranian oil exports and attacks on commercial vessels near the Strait of Hormuz revived concerns over supply security. Brent crude climbed above $78/bbl during the week before easing slightly as markets reassessed geopolitical risks.

The gap between propylene and ethylene prices also widened as propylene strengthened while ethylene remained comparatively stable. Traders are closely monitoring developments in crude oil, naphtha, propane, and ethane markets to determine whether the recent price recovery has stronger support.

Another notable change was the pricing relationship between China and Southeast Asia. This week, CFR China moved to a premium over CFR Southeast Asia, reversing the traditional price discount that had existed previously.

CFR China – Propylene

Latest Price: $915/ton
Weekly Change: ▲ $45/ton
Bid Range: $880-900/ton
Offer Range: $980-1,000/ton

CFR Southeast Asia – Propylene

Latest Price: $900/ton
Weekly Change: ▲ $20/ton
Bid Range: $870-890/ton
Offer Range: $980-1,000/ton

Northeast Asia Market Strengthens

Propylene prices in Northeast Asia gained momentum as stronger crude oil prices, higher propane costs, and improved domestic sentiment in China supported the market. CFR China prices increased by $45/ton, with traders raising offers following gains in domestic propylene futures.

Despite the recent rebound, current prices remain nearly 37% below the peak reached in early April, highlighting that the market has only recovered a portion of its earlier losses.

China's domestic supply also improved as additional propane dehydrogenation (PDH) units resumed operations. Operating rates were reported at around 70%, while Sinopec increased its propylene list prices by CNY200/ton to CNY7,800/ton. Spot prices in East China and Shandong were heard around CNY7,600-7,650/ton.

South Korea also saw improved propylene availability as PDH operating rates increased, although uncertainty surrounding Middle East developments continues to influence production expectations across the region. In Japan, supply remained relatively tight due to ongoing maintenance at several production facilities.

Southeast Asia Follows the Upward Trend

Southeast Asian propylene prices also moved higher, supported by gains in Northeast Asia and improving energy markets. The weekly increase marked the first positive movement after three months of continuous declines, although prices remain nearly 35% below the highs recorded in early April.

Market participants noted that stronger propane values have improved production economics, while short covering by several traders also contributed to the recent rebound. However, many sellers continue to monitor movements in crude oil and feedstock costs before setting fresh offers.

Additional spot cargoes from regional producers remain available, while supply is expected to gradually improve as several crackers restart operations across Southeast Asia. At the same time, prolonged shutdowns at some major production facilities continue to limit overall regional availability.

Outlook

Although sentiment has improved following the recovery in crude oil prices, most market participants believe that geopolitical developments remain the key short-term driver. Unless energy prices continue strengthening, underlying supply-demand fundamentals are expected to limit further gains in the Asian propylene market.

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