Recently, the propylene market in East China has shown a clear upward trend after the New Year's Day holiday. Following a brief adjustment, market prices have steadily risen, driven by favorable supply and demand fundamentals. As of January 12, the benchmark price of propylene on Business Society was 5,871.00 yuan/ton, representing a 2.68% increase compared to the beginning of the month (5,717.67 yuan/ton). The mainstream market prices have significantly rebounded compared to pre-holiday levels. This upward trend is primarily attributed to sustained cost pressures, positive supply-side developments, and the post-holiday restocking demand, leading to a tightening of spot supply. In the short term, prices may still have some room for further increases. **I. Market Status: Rising Price Levels and Significant Regional Price Differentials** Currently, the overall sentiment in the East China propylene market is strong. Specifically, Sinopec East China Company's listed price remains stable at 5,950 yuan/ton, serving as a key market reference. In terms of actual transactions, there are certain regional price differences: delivered prices in Jiangsu are higher, with a reference range around 6,200-6,250 yuan/ton, while ex-tank prices in Zhejiang are relatively lower, with a reference range around 5,950-6,000 yuan/ton. This regional price differential reflects variations in local supply-demand tightness and logistics costs. Overall, market buying interest shows acceptable tolerance for current prices, with trading activity primarily driven by rigid demand and cautious restocking. **II. Core Drivers of the Price Increase: A Trio of Cost, Supply, and Demand** This round of price increases is not due to a single factor but rather a resonance effect from three aspects: cost, supply, and demand. * **Cost Side: Providing Solid Bottom Support.** The price of methanol, a key raw material, continues to rise. As of January 12, the benchmark price of methanol on Business Society was 2,265.83 yuan/ton, up 2.64% from the beginning of the month (2,207.50 yuan/ton). The theoretical profit for the methanol-to-propylene (MTP) process route has fallen into deep losses, and the loss margin is still widening. The high production costs have significantly strengthened producers' willingness to maintain prices, providing solid bottom support for the market. Concurrently, the continuous rise in propylene prices in Shandong, a key market indicator, has positively influenced sentiment among East China market participants, creating a regional upward linkage. * **Supply Side: Tight Balance is Key to Pushing Prices Higher.** Recent market supply has been squeezed by both domestic plant fluctuations and reduced import volumes. Domestically, the restart date for the first-phase PDH unit at Ningbo Jinfeng remains undetermined. Units such as Nanjing Chengzhi's MTO and Shenghong's PDH began operating at reduced rates at the start of the month. Additionally, the restart of Ningbo Fude's MTO unit has been postponed to late January, and some companies plan maintenance in February, leading to a noticeable contraction in regional commodity supply. On the import front, due to production cuts at upstream plants in Japan and South Korea, the volume of propylene arriving at East China ports has decreased simultaneously. The simultaneous tightening of domestic and import supply has reinforced market expectations of future supply tightness, resulting in strong reluctance to sell among holders and further intensifying the tightness in the spot market. * **Demand Side: Providing Phased Support.** Post-holiday restocking demand from downstream factories, a customary practice, has brought substantial incremental procurement to the market. Meanwhile, prices of major downstream products like polypropylene (PP), n-butanol, and 2-ethylhexanol (2-EH) have also followed suit with some recovery. This has, to some extent, improved the profitability of downstream industries, thereby increasing their tolerance and acceptance of rising propylene feedstock costs. This has made the cost pass-through process relatively smooth in the short term. * As of January 12, the benchmark price of PP (Raffia) on Business Society was 6,376.67 yuan/ton, up 3.35% from the beginning of the month (6,170.00 yuan/ton). * As of January 12, the benchmark price of n-butanol (Industrial Grade) on Business Society was 5,773.33 yuan/ton, up 2.49% from the beginning of the month (5,633.33 yuan/ton). * As of January 12, the benchmark price of 2-ethylhexanol on Business Society was 6,983.33 yuan/ton, up 0.96% from the beginning of the month (6,916.67 yuan/ton). **III. Market Outlook: Support and Pressure Coexist, Upside Potential and Risks Are Present** Looking at the short-term market, propylene prices are expected to maintain a strong consolidation, but the upside potential is simultaneously constrained. Support primarily stems from the difficulty in quickly alleviating the tight spot supply situation in the short term. Concentrated plant maintenance, limited imports, coupled with the high cost floor, provide a basis for price exploration. However, upward pressure is also accumulating. Firstly, high prices may erode downstream profits. If major downstream sectors fall into losses, it will trigger resistance and slow down procurement, thereby curbing the upward momentum. Secondly, cost support may weaken. International crude oil faces oversupply expectations. If feedstock prices like propane correct, the support logic will loosen. Overall, cost and tight supply still dominate the recent market, but price increases will gradually stimulate negative feedback from the demand side. The subsequent room for increase and sustainability will highly depend on changes in downstream profitability and the follow-through of actual purchasing power. Close attention should be paid to key indicators such as plant dynamics, downstream operating rates, and profit margins.