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].