Tightening Supply Drove Up Propylene Prices, and There Is a Strong Expectation of a Pullback from Highs in November

In October, the domestic propylene market in India saw a significant increase in prices, primarily due to a contraction in supply. This contraction was caused by maintenance activities at key production facilities, which, combined with a surge in restocking demand from downstream sectors, led to a robust upward trend in the market. As of November 3, the benchmark price for propylene was recorded at 11,797.67 RMB/ton, marking a historic peak despite a slight decline from the beginning of the month.

Domestic production of propylene in October reached 5.0362 million metric tons, reflecting an increase from September's revised figure of 4.9278 million tons. However, the industry's average capacity utilization rate fell slightly to 69.00% from 69.60% in September. This decline was influenced by the shutdown of the Haiwei facility and ongoing offline status of the Zhenhua plant.

Conversely, the restart of the cracker unit at Yangzi Petrochemical contributed to a 1.3% increase in capacity utilization for that production route, reaching 72.6%. Despite these fluctuations, there is a strong expectation of a price pullback from the highs experienced in October as the market adjusts.

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