1、 This week’s core price performance

This week, the propylene market showed a pattern of rising, falling, and weak consolidation. As of May 19th, the benchmark price of propylene in Shengyi Society was 9214.33 yuan/ton, a decrease of 2.95% compared to the beginning of this month (9494.33 yuan/ton). The highest daily price during the week reached 9297.67 yuan/ton, and the lowest fell to 9214.33 yuan/ton, with an overall weekly fluctuation of 1%.
Core driving factors:
1. Supply side: The most critical bearish factor in the propylene market this week comes from the continuous increase in supply side: refineries and PDH units that were previously under centralized maintenance have been restarted one after another, and the overall operating rate of the industry has steadily rebounded. The supply of market goods has gradually increased, directly suppressing the upward space of prices.
2. Demand side: The profit margins of downstream major products such as polypropylene, epichlorohydrin, and butanol are limited, and the procurement of propylene raw materials is mainly based on essential needs, lacking sustained stocking and chasing after price increases.
During this week’s propylene price correction, the downstream willingness to receive goods did not significantly increase, and market transactions were mainly based on small orders for essential needs, lacking large-scale buying support, which made it difficult for prices to form an effective rebound and could only maintain a weak consolidation pattern.
4、 Future outlook:
In the short term, the pattern of weak consolidation in the propylene market will continue:
On a technical level, the downward signal of the 10 day moving average crossing the 20 day moving average has been confirmed, and the short-term moving average is bearish, indicating further downward momentum in prices; Fundamentally, the logic of incremental growth on the supply side is still ongoing, and it is difficult for the demand side to have an unexpected explosion. The market lacks strong support, and the price center of gravity is likely to continue to slowly shift downwards, testing the support level around 9000 yuan/ton.
In the medium to long term, the fundamentals of the propylene market have not completely deteriorated:
The price is still in the high range of one year, and the overall profitability of the industry is still acceptable; If the subsequent supply side increment falls short of expectations or there is a seasonal rebound in downstream demand, there is still a possibility for the market to recover and rebound.