China’s Local Ethylene, Propylene Markets Rally Amid Supply Fears

China’s domestic olefin markets recorded a sharp increase in prices after significant list price hikes announced by Sinopec, reflecting growing concerns over feedstock costs and potential supply disruptions linked to the ongoing Middle East conflict.

Sinopec raised its ethylene list price by CNY1,600/MT to CNY7,350/MT, marking a strong upward adjustment within a short period after earlier increases. The hike quickly impacted the spot market, where truck-based ethylene prices in East China surged by CNY1,500–1,550/MT to CNY7,350–7,400/MT, according to market sources.

The sharp rise highlights increasing anxiety across China’s petrochemical value chain, as market participants move quickly to secure feedstock amid fears of possible disruptions to Middle Eastern energy and feedstock flows, particularly naphtha and LPG shipments passing through the Persian Gulf.

Propylene markets followed a similar upward trend. In Shandong, spot propylene prices climbed by CNY950–1,000/MT to CNY7,450–7,500/MT, supported by stronger trading volumes for March delivery. Sinopec also increased its propylene list price by CNY950/MT to CNY7,450/MT, further strengthening the bullish sentiment in domestic markets.

Traders noted that the rapid price escalation reflects tightening spot availability along with rising upstream costs, as crude oil, propane, and naphtha prices have increased sharply following the escalation of tensions in the Middle East. Market participants are closely monitoring whether further reductions in cracker operating rates across Asia or disruptions to Middle Eastern feedstock shipments could push China’s olefin prices even higher in the coming period.

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