Propylene Prices in Asia Expected to Rise

The price trend for Propylene has been mixed in November with the prices being $1182 per tonne on November 5 which were around $66 lower than the prices in the beginning of the month. The prices experienced a rise during the first few days of the month and then stated to fall. As per the overall market trend given the factors affecting the prices, the prices are expected to pick up in the Asian markets.

The reasons for an expected price rise are strong downstream demand from the Polypropylene market. On the supply side there are expected constraints due to seasonal maintenance operations in major Propylene plants. Therefore, strong downstream demand and possible supply constraints are expected to push the prices which were falling in the start of the month.

The power outages in China and related lower operating rates are also a major factor affecting prices for propylene in the Asian markets. The reviving of the economic activity in the Asian market after the third wave of coronavirus pandemic has also given a boost to the demand for both Propylene and Polypropylene.

Propylene is obtained by cracking of petroleum hydrocarbons. Its major downstream products are Polypropylene, Propylene Oxide, Cumene, Acrylonitrile, Alcohols, Acrylic Acid, and others. The global demand for Propylene stood at around 120 million tonnes in 2020 and is expected to grow at a healthy CAGR of around 4.5% in the upcoming years.

As per ChemAnalyst, “given the bullish fundamentals on the demand side and a constrained supply scenario, the prices of Propylene are expected to rise to the October levels which were close to $1250 per tonne. The prices are expected to rise for most of the current month and then are expected to settle as the supply increases in countries like China.