Introduction: This week, the domestic propylene market experienced a narrow decline due to weak phased demand. As of October 19, the mainstream average price of propylene in Shandong was 10,565 RMB/ton, down 1.68% from October 12. Looking ahead, cost support remains solid, and combined with tight regional supply, there is limited room for further price declines. In the medium to long term, attention should be paid to the restart progress of units at Luxi Chemical and Zhenhua Petroleum. Once these units resume operation, regional output may see a phased increase, which will exert some pressure on propylene prices in Shandong.
| Daily Production | Oct 19 | Oct 12 | Difference | MoM Change |
|---|---|---|---|---|
| Daily Output (10k tons) | 3.02 | 3.05 | -0.03 | -0.98% |
| Capacity Utilization Rate (%) | 59.2% | 59.7% | -0.5% |
Data Source: Chempricehub Information
Table 2: Dynamics of Selected Units in Shandong (Capacity: 10k tons/year; Output Change: 10k tons)
| Enterprise | Process | Capacity | Status | Output Change (Oct 12-18) | Output Change (Oct 19-25) | |
|---|---|---|---|---|---|---|
| Xintai Petrochemical | FCC | 10 | Shut down on Oct 12, 2026; expected duration: one month | -0.14 | -0.14 | |
| 10 | -0.14 | -0.14 |
Data Source: Chempricehub Information
This week, fluctuations in propylene units in the Shandong region were limited, with only Xintai Petrochemical’s 100,000 tons/year catalytic cracking unit shutting down for maintenance.
In terms of production and operating rates, Shandong’s daily propylene output on October 19 was 30,200 tons, a decrease of 300 tons from 30,500 tons on October 12, representing a month-on-month drop of 0.98%. The capacity utilization rate was 59.2%, down 0.5 percentage points from 59.7% on October 12. The decline in output was primarily driven by multiple units undergoing maintenance: earlier shutdowns at Qilu Petrochemical and Lianhong New Materials, technical upgrades at a major plant in Yantai, and additional volume reductions from Xintai Petrochemical’s new maintenance cycle. Meanwhile, constrained by feedstock availability, most refineries maintained low operating loads, keeping regional supply tight.
Looking ahead, short-term maintenance units have no clear restart plans yet. Attention should be focused on the restart progress of units at Luxi Chemical and Zhenhua Petroleum. Once these units resume concentrated operations, regional output may recover in phases, thereby exerting some downward pressure on propylene prices in Shandong.
During this period, propane feedstock prices remained strong, but the upside potential for spot propylene prices was limited, squeezing profits for PDH processes. PDH margins fell by 549 RMB/ton compared to October 12. Downstream derivatives followed propylene raw materials in a narrow range, with profit levels recovering to varying degrees. Specifically, profits for acrylonitrile, octanol, and PP powder rebounded by 669 RMB/ton, 426 RMB/ton, and 430 RMB/ton respectively compared to October 12. Only Propylene Oxide (PO) saw a margin decline of 91 RMB/ton month-on-month.
Table 3: Fluctuations in Selected Downstream Units in Shandong (Capacity: 10k tons/year; Demand: 10k tons)
| Region | Enterprise | Product | Capacity | Status | Theoretical Demand (Oct 12-18) | Short-term Demand Change (Oct 19-25) |
|---|---|---|---|---|---|---|
| Shandong | Chambroad Petrochemicals | PP | 40 | Shut down on Sep 19, 2026; restarted on Oct 12 | 0.06 | 0.76 |
| Shandong | Shandong Lanfan | Octanol | 14 | Shut down on Oct 10, 2026; restarted on Oct 19 | -0.20 | 0.20 |
| Shandong | Jineng Chemical (Line 2) | PP | 45 | Shut down on Oct 12, 2026; restart date TBD | -0.91 | -0.91 |
| Shandong | Shandong Sanyue | PO | 32 | Shut down on Oct 14, 2026; Line 1 restarted on Oct 17, other lines restarting gradually | -0.22 | 0.44 |
| Shandong | Shandong Jinling | PO | 16 | Line 1 shut down on Oct 20, 2026; Line 2 shut down on Oct 23; expected restart early next month | - | -0.19 |
| Total | 147 | -0.32 | 0.06 |
Regarding downstream units, fluctuations in the Shandong region this period were mainly centered on PP and Propylene Oxide. After offsetting increases and decreases, theoretical demand is expected to rise by 600 tons.
Looking ahead, demand increments in the Zibo and Binzhou regions, driven by the restart of octanol and PO units, are expected to boost rigid demand. However, localized demand in Dongying may decline.
This week, the fluctuating decline in propylene raw material prices led to a slight improvement in the narrow spread between PP powder and propylene. As of October 19, the spread stood at 485 RMB/ton. Looking forward, there is limited room for propylene prices to fall further, keeping them relatively high overall. Meanwhile, PP powder prices are likely to remain flat due to constraints from end-user demand, making it difficult for the spread between the two to expand continuously. Key variables to monitor include: first, fluctuations in PP plant units; and second, the supply pressure on the spot market arising from increased external sales of propylene by integrated complexes.
In summary: In the short term, cost-side support remains solid. With regional supply continuing to be tight, there is limited room for further price declines, and prices may trade within a range of 10,400–10,500 RMB/ton. In the medium to long term, focus on the restart progress of units at Luxi Chemical and Zhenhua Petroleum. Once these units resume operation, regional output may see a phased recovery, which will exert certain downward pressure on propylene prices in Shandong.
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