Asia propylene: Steep decline leaves CFR China prices just $40/ton above pre-war levels

Asian propylene markets continued to weaken sharply this week as aggressive spot selling, ample regional supply, and lower feedstock costs kept pressure on prices across Northeast and Southeast Asia. Market participants noted that most of the conflict-driven premium built up during the Middle East tensions has now been erased, bringing prices close to pre-war levels.

According to market estimates, CFR China propylene prices have fallen to around $870/ton, while CFR Southeast Asia stands near $880/ton. The latest declines were triggered by lower-priced July transactions into China, which encouraged buyers to lower bids and pushed sellers to reduce offers further.

Propylene Price Snapshot

CFR China

Current Price: $870/ton
Weekly Change: ▼ $90/ton
Bid Range: $850-860/ton
Offer Range: $950-1,000/ton

CFR Southeast Asia

Current Price: $880/ton
Weekly Change: ▼ $90/ton
Bid Range: $850-860/ton
Offer Range: $950-1,000/ton

In Southeast Asia, prices have dropped by nearly 19% over the past two weeks and are now around 42% below the peak levels seen in early April. Falling propane values and increasing spot availability have added to bearish sentiment. However, some traders believe the market is approaching production-cost levels, which could limit further steep declines.

Regional availability is expected to improve further in July as several producers resume operations. Malaysia’s PRefChem has restarted key units and is offering spot volumes, while Petronas is preparing to restart its Kertih cracker. At the same time, some outages remain in place across Southeast Asia, partially offsetting the increase in supply.

In Northeast Asia, fresh spot sales into China accelerated the correction. Prices have fallen around 18% over the past two weeks and are now only slightly above levels seen before the Middle East conflict. Domestic Chinese supply has also increased following the restart of several PDH units, while local propylene prices have been reduced significantly amid weak sentiment.

South Korean production remains relatively high due to elevated PDH operating rates, although traders expect some producers to consider output reductions if current price weakness persists. Japan continues to see tighter supply conditions because of ongoing cracker and refinery maintenance programs.

Market participants expect July to remain challenging as additional supply enters the market and downstream demand stays weak. However, shrinking producer margins and the possibility of future operating rate cuts may help prevent another major collapse in prices.

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