Report Industry Investment Rating - Unilateral: Neutral; Inter - period: PL01 - 02 short at high prices; Inter - variety: None [3] Core Viewpoints - The cost support for propylene has weakened, leading to a decline in its price. Supply is supported by some PDH device maintenance and restart delays, while demand is weak due to price drops and cost pressure. The cost support is weakened by falling international oil prices and propane prices, but the impact of Sino - US trade frictions on propane supply needs attention [1][2] Summary by Relevant Catalogs 1. Propylene Basis Structure - Include figures on the closing price of the propylene main contract, East China and North China basis, 01 - 05 contract, and East China and Shandong market prices [6][9][11] 2. Propylene Production Profit and Operating Rate - Include figures on the difference between propylene CFR in China and naphtha CFR in Japan, propylene capacity utilization rate, PDH production gross profit and capacity utilization rate, MTO production gross profit, methanol - to - olefin capacity utilization rate, propylene naphtha cracking production gross profit, and crude oil refinery capacity utilization rate [16][23][25] 3. Propylene Import and Export Profit - Include figures on the differences between FOB in South Korea, CFR in Japan, CFR in Southeast Asia and CFR in China, and propylene import profit [32][34] 4. Propylene Downstream Profit and Operating Rate - Include figures on the production profit and operating rate of PP powder, propylene oxide, n - butanol, octanol, acrylic acid, acrylonitrile, and phenol - acetone [40][42][45] 5. Propylene Inventory - Include figures on propylene factory inventory and PP powder factory inventory [65]

1. Report Industry Investment Rating - Unilateral: Neutral; Inter - period: PL01 - 02 inter - period reverse spread; Cross - variety: None [3] 2. Core View - Supply - side overall start - up increased month - on - month, PDH device start - up rate rebounded, some major manufacturers had maintenance plans, and the expected reduction in the market supply supported propylene prices. Downstream start - up showed a mixed trend, with the start - up of phenol - acetone increasing rapidly, and the demand had a small - scale phased support. The cost of propylene decreased as crude oil weakened and propane prices declined. Attention should be paid to the geopolitical situation's impact on the crude oil end [2] 3. Summary by Directory 3.1 Market News and Important Data - Propylene: The closing price of the main propylene contract was 6,491 yuan/ton (+40), the spot price in East China was 6,400 yuan/ton (+75), and in North China was 6,540 yuan/ton (+240). The basis in East China was - 91 yuan/ton (+35), and in North China was 49 yuan/ton (+200). The propylene start - up rate was 74% (+1%), the difference between propylene CFR in China and naphtha CFR in Japan was 200 US dollars/ton (+1), the difference between propylene CFR and 1.2 propane CFR was 96 US dollars/ton (-6), the import profit was - 286 yuan/ton (+0), and the in - plant inventory was 34,420 tons (+830) [1] - Propylene downstream: PP powder start - up rate was 38% (+1.48%), production profit was - 160 yuan/ton (-150); propylene oxide start - up rate was 74% (+1%), production profit was - 271 yuan/ton (-162); n - butanol start - up rate was 89% (-7%), production profit was - 267 yuan/ton (-99); octanol start - up rate was 77% (-1%), production profit was 448 yuan/ton (-172); acrylic acid start - up rate was 79% (-1%), production profit was 406 yuan/ton (-53); acrylonitrile start - up rate was 74% (-2%), production profit was - 625 yuan/ton (-210); phenol - acetone start - up rate was 77% (+4%), production profit was - 672 yuan/ton (+0) [1] 3.2 Market Analysis - Supply side: The overall start - up increased month - on - month, PDH device start - up rate rebounded, some major manufacturers had maintenance plans, and the market supply was expected to tighten [2] - Demand side: Downstream start - up showed a mixed trend, the start - up of phenol - acetone increased rapidly, and the demand had a small - scale phased support [2] - Cost side: Crude oil weakened, and the decline in Saudi CP drove down propane prices, leading to a downward shift in propylene cost support [2] 3.3 Strategy - Unilateral: Neutral; Inter - period: PL01 - 02 inter - period reverse spread; Cross - variety: None [3] 3.4 Directory Details - **Propylene basis structure**: Includes figures such as the closing price of the main propylene contract, East China and North China basis, etc. [7][10][12] - **Propylene production profit and start - up rate**: Involves figures like the difference between propylene CFR in China and naphtha CFR in Japan, propylene capacity utilization rate, etc. [17][24][29] - **Propylene import and export profit**: Covers figures such as the difference between South Korea FOB and China CFR, Japan CFR and China CFR, etc. [32][34] - **Propylene downstream profit and start - up rate**: Contains figures like PP powder production profit and start - up rate, propylene oxide production profit and start - up rate, etc. [40][45][50] - **Propylene inventory**: Includes figures of propylene in - plant inventory and PP powder in - plant inventory [67]

Report Industry Investment Rating No relevant content provided. Core Views of the Report - The propylene market in Shandong has shifted from tight supply before 2016 to near - balance or even oversupply currently due to the high - speed commissioning of propylene plants, especially PDH and naphtha cracking plants [4][12][28]. - After the listing of propylene futures, the market mainly trades on strong macro - policy expectations. The "anti - involution" policy is expected to promote the rectification and elimination of old - fashioned plants, which may reduce propylene supply and have a positive impact, but the extent remains to be tracked [14]. - In the short term, the propylene market shows a weak consolidation. Supply pressure persists with expected increases in propylene circulation due to plant restarts and new capacity releases. Demand has some short - term support but may not be sustainable during the off - season. Cost support from rising oil prices is offset by supply - demand pressures, resulting in a downward - pressured price trend [14]. Summary by Directory 1. Research Purpose - Explore the impact of propylene futures listing on the industry and understand the supply - demand situation of the propylene market in Shandong [10][11]. 2. Research Conclusion - **Supply - Demand Pattern**: Shandong's propylene production capacity exceeds 15 million tons, accounting for 21% of the national total, and the external sales volume accounts for 39%. It has changed from a supply - tight to a near - balanced or oversupplied market. There is a demand gap of nearly 600,000 tons, and it is a major propylene - importing province. Propylene flows in from the Northeast, Northwest, North, and Central China and flows out to East China [4][12][25]. - **Trading Mode**: Shandong is the national price benchmark for propylene, with earlier spot quotations. Contract sales in Shandong are less than 50%. Contracts are usually signed annually and settled monthly, while spot sales are full - payment locked - price. The flow of goods is determined by price differences, freight, and demand [4][12]. - **Cost - Profit**: The propane consumption of PDH plants is between 1.14 - 1.2, and the theoretical processing cost is between 1200 - 1500 yuan. The full cost of PDH - produced propylene is around 6100 - 6300 yuan/ton. Freight varies by transportation mode [4][15]. - **Inventory**: Inventory varies among enterprises. PDH enterprises generally have larger storage capacity and longer storage periods. During the research, enterprises reported low inventory and no obvious inventory pressure [4][15]. 3. Core Logic and Future Outlook - After the listing of propylene futures, the market is influenced by macro - policy expectations. The "anti - involution" policy may reduce supply, but the impact needs further observation. Currently, the market is in weak consolidation. Supply pressure exists due to plant restarts and new capacity, demand has short - term support but limited sustainability, and cost support is offset by supply - demand pressures [14]. 4. Specific Situations of Research Enterprises - **Enterprise A**: Total propylene capacity is 70,000 tons/year, using catalytic cracking. All products are sold externally. Current external sales are about 270 tons/day. The enterprise believes the market is oversupplied and focuses on PDH operations [15][16]. - **Enterprise B**: Total capacity is 355,000 tons/year, with 105,000 tons from catalytic cracking and 250,000 tons from PDH. One of the two gas - fractionation units is operating, with an output of about 75 tons/day. The PDH unit has been shut down for over three months [17]. - **Enterprise C**: Total capacity is 420,000 tons/year, with a 70% load on the mixed - alkane dehydrogenation unit. By - product hydrogen is sold externally. The acrylic acid unit is operating, and the propylene oxide unit is shut down due to profit issues [20]. - **Enterprise D**: Total capacity is 380,000 tons/year, with 80,000 tons from catalytic cracking and 300,000 tons from PDH. Only the gas - fractionation unit is operating, with an output of about 200 tons/day. The PDH unit is shut down [22]. - **Enterprise E**: Total capacity is 600,000 tons/year, using PDH. The PDH unit is operating at 90% load. The enterprise has a low - inventory strategy and is bearish on the market [24]. 5. Analysis of the Supply - Demand Pattern of Shandong Propylene - Shandong is a major propylene production and sales area, with a production capacity exceeding 15 million tons, accounting for 21% of the national total and an external sales volume accounting for 39%. There are regional differences within Shandong. There is a demand gap of nearly 600,000 tons, and the market has shifted from tight supply to near - balance or oversupply [25][27][28].