Lead:
During this period, domestic propylene prices showed a volatile and weakening trend. The decline was mainly dragged by insufficient cost support from raw materials and persistently weak downstream demand. As of June 15, the average mainstream price of propylene in Shandong stood at 8,550 yuan/ton, down 3.44% from the average on June 8, signaling a shift from a slow decline to a rapid and broad price drop. In the short term, no clear positive catalysts are observed from either the cost or demand side. Propylene prices are expected to continue their downward trend. Future recovery in costs and downstream demand will remain key drivers for price movements.

I. Supply Side: Stable Plant Operations, Slight Decline in Weekly Output

[Figure 1: Shandong Propylene and PDH Operating Rate Trends — omitted per instructions]

[Source: chempricehub资讯 — omitted per instructions]

Table 1: Dynamics of Selected Shandong Plants (10,000 tons/year, 10,000 tons)

| Region | Company | Process | Capacity | Status | Output Change (6.8-6.14) | Marketable Volume Trend (6.15-6.21) |
|--------|---------|---------|----------|--------|---------------------------|--------------------------------------|
| Shandong | Zibo Junchen | Catalytic | 7 | Shut down on 2026/5/9, restart TBD | -0.11 | -0.11 |
| Shandong | Shandong Hengtong | MTO | 18 | Shut down on 2026/6/12, restart TBD | -0.08 | -0.18 |
| Shandong | Yatong Petrochemical | Catalytic | 6 | Shut down on 2026/6/5, expected 1 month | -0.08 | -0.08 |
| Total | | | 31 | | -0.27 | -0.37 |

[Source: chempricehub资讯 — omitted per instructions]

During this period, PDH plants in the region operated stably, with an average operating rate maintained at 81.16%. Apart from PDH units, other propylene production units in the region experienced limited fluctuations. Only Shandong Hengtong's 180,000-ton/year MTO unit was shut down during this period. Due to this shutdown, the average comprehensive operating rate of propylene in Shandong fell to 66.00%.

Considering the dynamics of regional plants, no new maintenance or load reduction plans are expected in the short term, but existing shutdowns will continue to affect supply. Based on comprehensive calculations, Shandong's weekly propylene output is expected to continue its declining trend during the June 15–21 period, with total output projected at 239,200 tons, down 700 tons month-on-month.

II. Demand Side: Significant Improvement in Downstream Profitability, Stable Plant Operations

[Figure 2: Profit Trend of Shandong Propylene and Downstream Derivatives — omitted per instructions]

[Source: chempricehub资讯 — omitted per instructions]

As propylene prices continue to fall, cost pressure on downstream derivative raw materials has eased, leading to a noticeable recovery in the profitability of most products. By category, the improvement in profitability for PP powder and octanol was the most significant, with average weekly profits up 72% and 68% respectively month-on-month. The average weekly profit for propylene oxide (PO) rose 39% month-on-month, while that for acrylonitrile saw a slight increase of 11%.

Table 2: Fluctuations of Selected Downstream Plants in Shandong (10,000 tons/year, 10,000 tons)

| Region | Company | Product | Capacity | Status | Theoretical Demand (6.8-6.14) | Short-term Demand Change (6.15-6.21) |
|--------|---------|---------|----------|--------|-------------------------------|----------------------------------------|
| Shandong | Shandong Minxiang | PO | 30 | Shut down on 2026/2/13, restart TBD | -0.52 | -0.52 |
| Shandong | Dongming Dongfang | Octanol | 10 | Shut down on 2026/5/20, restart TBD | -0.15 | -0.15 |
| Shandong | Zhonghai Jingxi | PO | 8 | Shut down on 2026/5/17, restart TBD | -0.14 | -0.14 |
| Shandong | Shandong Jianlan | Octanol | 14 | Shut down on 2026/5/22, expected ~10 days | -0.21 | -0.21 |
| Shandong | Shandong Jianlan | Octanol | 7 | Shut down on 2026/5/24, expected ~15 days | -0.11 | -0.11 |
| Shandong | Jincheng Petrochemical | PO | 30 | Shut down on 2023/5/24, restart TBD | -0.52 | -0.52 |
| Shandong | Kelo Chemical | Acrylonitrile | 26 | Shut down on 2026/4/22, expected 1-2 months | -0.57 | -0.57 |
| Shandong | Luxi Chemical | Octanol (Line 2) | 25 | Shut down on 2026/5/18, expected one month | -0.38 | -0.38 |
| Shandong | Shandong Kaitai | Acrylic Acid | 3 | Shut down on 2026/5/29, expected restart 6/12 | -0.04 | -0.04 |
| Shandong | Shandong Kaitai | Acrylic Acid | 8 | Shut down on 2026/6/10, expected 10 days | -0.12 | -0.12 |
| Shandong | Lanfan Chemical | Octanol | 14 | Shut down on 2026/6/7, expected one week | -0.21 | -0.21 |
| Total | | | 175 | | -2.97 | -2.97 |

Note: These are theoretical values based on product output and unit consumption, for trend reference only.

[Source: chempricehub资讯 — omitted per instructions]

Analyzing from the operating rates of downstream plants, major downstream production units in the region operated stably during this period, with no significant changes in load. Looking ahead, no concentrated maintenance, large-scale load reduction, or restart plans are expected for downstream units, so the overall operating status is likely to remain unchanged. Although profitability has improved for some products, downstream companies are still mainly purchasing on a demand basis, with weak willingness for new procurement. Overall, demand-side support for propylene prices remains limited.

III. Price Spread: PP Powder-Proylene Spread Continues to Widen, Stable Demand Procurement

[Figure 3: PP Powder-Proylene Price Spread Trend — omitted per instructions]

[Source: chempricehub资讯 — omitted per instructions]

Since the end of May, the price spread between PP powder and propylene has continued to widen. During this period, the average spread reached 739 yuan/ton, expanding 20% month-on-month. The loose spread benefits PP powder producers, boosting their purchasing enthusiasm and providing periodic buying support for propylene.

Looking ahead, the PP powder-propylene spread is expected to remain in a relatively loose pattern, and the procurement demand for propylene from downstream powder producers is likely to stay stable. However, at the same time, some previously shut-down PP pellet plants have gradually restarted, intensifying industry homogenization competition. This may suppress PP product prices, indirectly dragging down propylene prices.

IV. Cost & Macro: Geopolitical News Disturbs Oil Prices, Cost Side Continues to Weaken

Recently, diplomatic negotiations between the US and Iran have made progress. The two sides have drafted a memorandum of understanding and plan to formally sign the agreement on June 19. The Strait of Hormuz is expected to resume normal navigation. Following this news, international oil prices fell sharply, with Brent crude at one point dropping as much as 5% intraday, increasing market pessimism.

Currently, domestic refining and chemical companies are still digesting previous high-priced raw material inventories. Combined with weakening international oil prices, propylene futures markets are also under pressure, further affecting spot market trading sentiment. It is important to note that US-Iran negotiations still involve uncertainties. Full restoration of strait navigation and reconstruction of crude oil logistics will take time. Market operations should remain cautious and not overly bearish.

V. Trend Outlook: Short-term Prices Continue to Fall, Possible Small Rebound Later

In the short term, the propylene market lacks substantive positive factors in both supply/demand and cost aspects. The weak pattern is difficult to reverse, and prices are likely to continue declining, with a core operating range of 8,400–8,500 yuan/ton. If macro-level negative factors continue to ferment and international oil prices fluctuate sharply, market sentiment will further weaken, and prices may drop to the 8,200–8,300 yuan/ton range. Looking ahead, as propylene prices gradually fall, coupled with the approaching Dragon Boat Festival holiday, downstream pre-holiday stockpiling demand may be released, leading to a slight recovery in market conditions.

Risk Reminders

• Downside risks: Continued decline in international oil prices; weaker-than-expected downstream stockpiling; resumption of propylene plants increasing supply.
• Upside risks: Changes in US-Iran negotiations; renewed geopolitical conflicts in the Middle East pushing up oil prices; concentrated downstream restocking boosting demand.