Overview: Over the current period, the domestic propylene market price showed a fluctuating downward trend. The core driver was the limited recovery of downstream overall demand, which exacerbated divergence in sales performance among enterprises, putting pressure on prices. As of June 6, the average mainstream price of propylene in Shandong was 8,850 yuan/ton, down 1.50% from the average price on June 6. Looking at the short term, as propylene prices continue to decline, downstream buyers are more willing to restock at low prices. Coupled with the expectation of restarting some downstream units currently under maintenance later, the market is poised for a phase of gradual warming.

I. Supply Side: Slight Fluctuations in PDH Unit Operations, Phased Increase in Output

During the period, the operation of domestic PDH units showed slight fluctuations, mainly driven by the restart of Wanhua Penglai's 900,000 ton/year PDH unit. Consequently, the weekly propylene output in Shandong reached 226,300 tons, a slight increase of 2.86% month-on-month. The industry average operating rate recovered to 63.29%, leading to a looser overall supply situation.

Looking ahead, there are no clear maintenance plans yet. However, as Wanhua Chemical's unit continues to ramp up, propylene output is expected to increase further. It is estimated that Shandong's weekly propylene output from June 8 to June 14 will rise to 240,600 tons, an increase of 14,300 tons compared to the previous week. Additionally, attention should be paid to the restart progress of PDH units in other regions, such as Honghong and Maoming, as their operational changes will directly impact the regional supply pattern.

II. Demand Side: Clear Profit Differentiation Downstream, Unit Changes Weaken Demand

Looking at downstream profitability, the profit pattern for propylene derivatives continued to diverge. PP powder and octanol benefited from lower propylene prices combined with their own market recoveries, leading to sustained profit repair. For PP powder, the average weekly profit rose by 72 yuan/ton to 168 yuan/ton. For octanol, the average weekly loss narrowed by 111 yuan/ton to -399 yuan/ton. On the other hand, the markets for propylene oxide and acrylonitrile weakened, causing significant profit declines and further expanding losses. The average weekly loss for propylene oxide deepened by 445 yuan/ton to -1,574 yuan/ton, while the average weekly loss for acrylonitrile increased by 187 yuan/ton to -1,189 yuan/ton. With most downstream products facing profit pressure, enterprises have low production willingness and tend to be cautious in raw material procurement, which in turn restricts the propylene market.

Regarding unit operations, downstream supporting units in Shandong operated stably overall during the period, with only a few units undergoing start-stop adjustments. The Hongxin acrylic acid unit restarted, while Lanfan Chemical's octanol unit shut down. Consequently, regional demand decreased by 26,100 tons.

Looking ahead, the Hongxin acrylic acid unit will continue to ramp up. Additionally, both the Kaitai acrylic acid unit and the Jianlan octanol unit are scheduled to resume production, which is expected to lead to a phased recovery in demand. After offsetting various changes, the estimated theoretical demand reduction from major regional downstream units is expected to narrow to 24,100 tons. Furthermore, the profitability of PP powder remains relatively good, providing a bottom support for propylene prices.

III. Sales Side: Persistent Weakening of Enterprise Sales, Signal of Improving Market Sentiment

As shown in the data, the daily sales volume of sample enterprises fell from 5,000 tons to 3,500 tons during the period, further confirming the weak downstream purchasing atmosphere. However, as propylene prices have continued to decline recently, market transactions have gradually picked up. On June 6, the daily sales volume of sample enterprises rebounded to 6,200 tons, easing the inventory and sales pressure for manufacturers.

IV. Trend Outlook: Short-Term Phased Recovery, Medium-to-Long Term Still Weak

(A) Short-Term Trend: Downstream Restocking at Low Prices, Phased Price Correction

In the short term, although cost support has slightly loosened, the overall base remains high, providing solid bottom support. Combined with the continuous decline in propylene prices stimulating downstream restocking at low levels, and the planned restart of some downstream units under maintenance, the expectation for a phased market improvement is strengthening. The mainstream average price is expected to find support around the 8,900-9,000 yuan/ton range.

(B) Medium-to-Long Term Trend: Cost-Demand Game, Range-Bound Fluctuations

In the medium-to-long term, high-cost pressures on enterprises are difficult to alleviate, and there is still room for supply growth. While there is an expectation for demand recovery on the demand side, the pace of unit restarts is scattered, and improvements in downstream profitability are limited. In the tug-of-war between cost and demand, the price center is likely to shift downward, with overall prices fluctuating within the 8,800–9,200 yuan/ton range.