Asian Propylene Prices Stabilize at Six-Month Highs as November Shortfalls Ease

Asian propylene prices remained largely stable at six-month highs this week after rising sharply over the previous two weeks. The earlier rally was driven by aggressive buying from Chinese traders amid an unexpected supply squeeze, pushing Northeast Asian prices to $1,350/ton CFR NEA/China. However, the upward momentum eased as major traders reportedly covered most of their supply shortfalls for the first half of November. Southeast Asian spot prices also remained steady, following the pause in Northeast Asia.

Elevated energy and feedstock costs continued to support the market. December crude futures remained volatile amid growing geopolitical risks, including attacks on shipping in the Strait of Hormuz, Houthi strikes on Saudi oil infrastructure and the collapse of an energy truce between Russia and Ukraine.

Concerns over Saudi oil supply intensified after further drone attacks reportedly prompted the closure of the strategic East-West pipeline. The pipeline transports crude to Yanbu on the Red Sea, providing an alternative export route to the Strait of Hormuz. Saudi Arabia also reportedly intercepted missiles over the Red Sea on Friday, including one targeting the Yanbu export terminal, raising fresh concerns about the security of alternative crude export routes.

Against this backdrop, Asian naphtha prices rose to $1,010/ton CFR Japan on Tuesday. Propane prices climbed to $972/ton CFR Japan, up 7.5% from $903/ton two weeks earlier.

Asian Propylene Price Snapshot

CFR China

Latest Price: $1,350/ton

Weekly Change: Unchanged

Bid Range: $1,310–1,330/ton

Offer Range: $1,350–1,400/ton

CFR Southeast Asia

Latest Price: $1,330/ton

Weekly Change: Unchanged

Bid Range: $1,300–1,310/ton

Offer Range: $1,350–1,400/ton

Northeast Asian Rally Pauses as Traders Cover November Needs

Northeast Asian propylene prices stayed close to their recent highs this week, although the sharp gains recorded over the previous two weeks lost momentum. Key traders reportedly covered around 80% of their supply shortfalls for the first half of November.

Chinese traders remained the main participants in the spot market, while most end-users continued to rely on term contracts. Offers for November loading or arrival were steady at $1,350–1,400/ton CFR NEA/China, while bids edged up to $1,320–1,330/ton CFR NEA/China.

In floating-price discussions, traders’ buying ideas stood at discounts of $30–40/ton to CFR NEA assessments on an FOB South Korea basis. On a CFR NEA basis, buying ideas were at premiums of $25–35/ton. Both indications applied to November loading or arrival.

Taiwan’s Formosa reportedly awarded a sales tender for 20,000 tons of November-loading propylene at a premium of $10/ton to CFR NEA assessments on an FOB Taiwan basis, according to traders. Previously, the producer had sold approximately 20,000 tons of October-loading spot cargoes to four trading firms through another tender. Those cargoes were awarded under a floating-price formula linked to CFR NEA assessments, on an FOB Taiwan basis with a freight discount.

Chinese Domestic Prices Extend Gains Amid Low Inventories

Unlike the largely stable import market, domestic propylene prices in China continued to rise as inventories declined and traders remained active buyers.

Prices in Shandong and East China increased by CNY300–400/ton to CNY10,400–10,600/ton. Sinopec also raised its propylene prices by CNY300/ton to CNY10,500/ton during the week.

China’s propane dehydrogenation (PDH) operating rate remained around 63%, with several units offline for maintenance. Fujian Soft Packaging shut its 900,000 tons/year No. 2 PDH unit in early October, with no confirmed restart date. Oriental Petrochemical also took its 600,000 tons/year PDH plant offline in early October.

Grand Pacific Chemical’s 600,000 tons/year PDH unit has been shut since late September, with no restart date announced. Hebei Haiwei’s 500,000 tons/year unit and Quanzhou Guoheng’s 660,000 tons/year plant were also taken offline for maintenance in late September.

Northeast Asian Supply Expected to Remain Tight Into November

Propylene availability across Northeast Asia is expected to remain constrained into November and much of the fourth quarter as several South Korean crackers undergo scheduled maintenance.

LG Chem’s 1.3 million tons/year cracker was scheduled to shut in mid-October for a 45-day turnaround. Korea Petrochemical Industry Co. (KPIC) also planned to take its 800,000 tons/year cracker offline around the same period for approximately 40 days. The KPIC unit had been operating at around 65% capacity before the planned shutdown.

In Japan, lower PDH operating rates and maintenance at refinery fluid catalytic cracking (RFCC) units have also restricted propylene availability.

Southeast Asian Prices Hold Firm as Buying Activity Slows

Southeast Asian propylene prices also stabilized following the recent surge. Lingering demand from traders covering early-November shortfalls continued to provide support, although buying became less aggressive after several participants secured spot cargoes at significantly higher prices the previous week. Limited regional supply remained a key factor supporting prices.

A Singapore-based trader said many Southeast Asian traders were likely to stay on the sidelines over the coming weeks in an effort to avoid the unexpected rise in spot propylene prices across Northeast and Southeast Asia. However, tight regional inventories and elevated crude, propane and naphtha prices could limit any price decline. The trader added that an unexpected outage at a major PDH unit or cracker could trigger another sharp increase in spot propylene prices.

In floating-price discussions, traders’ buying ideas were at premiums of $25–35/ton to CFR SEA assessments on a CFR SEA basis and at discounts of $10–15/ton on an FOB SEA basis.

Regional propylene supply is expected to remain tight into November and the fourth quarter as several major crackers continue to operate at reduced rates.

In Malaysia, PRefChem’s 1.29 million tons/year Pengerang cracker continued to run at 60–70% capacity, according to traders. The company also reportedly shut its crude distillation unit (CDU) during the week because of technical issues.

In Thailand, Rayong Olefins’ 900,000 tons/year Map Ta Phut cracker, which restarted in mid-September following a shutdown that began in March, was reportedly operating at around 80% capacity.

Meanwhile, Singapore’s Aster Chemicals & Energy continued to operate its 1.15 million tons/year Pulau Bukom cracker at 50–60% capacity. In Indonesia, PT Lotte Chemical Indonesia reduced operating rates at its 1 million tons/year Cilegon cracker to 50–55% amid feedstock concerns. ExxonMobil’s older 900,000 tons/year Jurong cracker in Singapore has also remained offline since March.

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