Post-New Year's Day, propylene prices have indeed shown a trend of stabilizing after a decline and experiencing a slight upward movement, with short-term momentum for further increases, though the overall upward potential is expected to be limited. As of January 7, the benchmark price of propylene on Business Society was 5,797.67 RMB/ton, representing a 1.40% increase compared to the beginning of the month (5,717.67 RMB/ton). **Supply Side:** Some PDH units are planning maintenance due to cost pressures, which may reduce supply. Inventories among enterprises in the Shandong region are relatively low, and shipments are proceeding smoothly. **Demand Side:** New downstream capacity has been added in the northern market. Entering February, pre-holiday stockpiling may lead to a temporary boost in demand. The market as a whole remains oversupplied, with the propylene industry in an expansion cycle. The fundamental loose supply-demand balance is unlikely to reverse significantly in the short term. Downstream demand support is limited, with the main downstream polypropylene facing significant cost pressures, leading to shutdowns at some facilities. As of January 7, the benchmark price of PP (fiber grade) on Business Society was 6,253.33 RMB/ton, up 1.35% from the beginning of the month (6,170.00 RMB/ton). This provides some support for propylene demand. The sustainability of the post-New Year's Day price increase requires observation, with the key factor being downstream acceptance capacity. **Propylene Oxide (PO):** Profitability is relatively favorable (theoretical gross margin exceeded 1,500 RMB/ton as of January 2), with operations maintained at high levels and stable demand. As of January 7, the benchmark price of propylene oxide on Business Society was 7,816.67 RMB/ton, up 1.08% from the beginning of the month (7,733.33 RMB/ton). **Cost Side:** The core contradiction on the cost side currently lies in the conflict between the "low prices" of raw materials such as oil and propane and the "deep losses" in PDH processes. This results in cost support facing both downward pressure and upward momentum due to supply contraction. **Price Outlook:** - **Predicted average market price for January:** Approximately 5,800 RMB/ton. - **Key resistance level to watch:** 5,850 RMB/ton (a critical observation point for this round of price increases). - **Overall assessment for Q1:** There is a higher probability of a slight upward shift in the price center, but a strong unilateral rally is not expected. In summary, the current market presents a scenario of short-term rebound coexisting with long-term pressure: - **Short-term opportunities:** Tightening supply (low inventories, maintenance expectations) and seasonal demand (pre-holiday stockpiling) are the main drivers of price increases. Attention should be paid to whether prices can effectively break through the 5,850 RMB/ton threshold. - **Long-term pressure:** The oversupplied industry structure is the fundamental constraint. Although 1.9 million tons of new capacity is planned for commissioning in Q1, its impact will primarily be felt in East and South China, with limited direct effects on the key Shandong market. - **Key variables:** Close monitoring of international oil price trends and their transmission to costs, as well as the profitability and operating rates of downstream industries such as polypropylene, will determine the sustainability of the upward trend.