Report Investment Rating - Unilateral: Neutral; the supply-demand gap is narrowing, but the upward driving force is limited, and it may mainly fluctuate in the bottom range [3] Core View - Upstream maintenance has increased, leading to a decline in propylene production. Meanwhile, downstream production resumption has led to an overall increase in downstream operations, narrowing the supply-demand gap of propylene and improving spot market trading. However, the expectation of a loose propylene supply-demand situation remains unchanged, and there is insufficient upward driving force in the fundamentals, so the market remains in a low-level oscillation. The supply-side reduction provides short-term support for prices, and the demand-side support for propylene has strengthened, but it may decline. The cost side of propylene has support [2] Summary by Directory 1. Propylene Basis Structure - The main contract closing price of propylene is 5,881 yuan/ton (+74), the spot price of propylene in East China is 5,945 yuan/ton (+20), the spot price of propylene in North China is 5,925 yuan/ton (-15), the basis of propylene in East China is 64 yuan/ton (-54), and the basis of propylene in North China is 8 yuan/ton (-86) [1] 2. Propylene Production Profit and Capacity Utilization - The capacity utilization rate of propylene is 88% (+14%), the CFR of Chinese propylene - CFR of Japanese naphtha is 173 US dollars/ton (+21), and the CFR of propylene - 1.2 CFR of propane is 59 US dollars/ton (+10) [1] 3. Propylene Import and Export Profit - The import profit of propylene is -331 yuan/ton (-89) [1] 4. Profit and Capacity Utilization of Propylene Downstream - The capacity utilization rate of PP powder is 47% (+3.02%), and the production profit is -255 yuan/ton (-45); the capacity utilization rate of propylene oxide is 75% (+0%), and the production profit is 647 yuan/ton (+8); the capacity utilization rate of n-butanol is 82% (-2%), and the production profit is -286 yuan/ton (+9); the capacity utilization rate of octanol is 77% (+8%), and the production profit is -138 yuan/ton (+111); the capacity utilization rate of acrylic acid is 73% (-2%), and the production profit is 479 yuan/ton (-14); the capacity utilization rate of acrylonitrile is 80% (+1%), and the production profit is -296 yuan/ton (+5); the capacity utilization rate of phenol-ketone is 79% (+12%), and the production profit is -415 yuan/ton (+0) [1] 5. Propylene Inventory - The in-plant inventory of propylene is 45,040 tons (-2,150) [1]

Core Viewpoint - Propylene futures experienced slight fluctuations, closing at 6420.0 yuan with a 0.22% increase, indicating a mixed market sentiment regarding future price movements [1] Group 1: Market Analysis - Newhu Futures reported that propylene prices are fluctuating, with current spot prices at 6600 yuan/ton in East China and 6680 yuan/ton in Shandong, indicating limited circulation pressure in Shandong due to some plants planning to restart [1] - The new production capacity scheduled for September is mostly paired with downstream facilities, which will have a limited impact on circulating spot prices [1] - The rising price of propane is providing cost support, while terminal demand remains stable, leading to thin production profits and low acceptance of high-priced sources by manufacturers [1] Group 2: Supply and Demand Dynamics - Huatai Futures noted that the supply side is tightening, with the restart of Wanhu's facilities and expectations for Hebei Haiwei's restart, while Shandong Zhenhua's PDH restart is delayed until mid to late September [1] - The overall operating rate of propylene is declining, which supports the continuous rise of spot prices, although high propylene prices are compressing downstream profits, leading to reduced purchasing enthusiasm [1] - The cost side remains supported by OPEC+ production expectations and stable external propane prices, while the overall sentiment towards propylene remains cautious [1]

1. Report Industry Investment Rating - Unilateral: Neutral; PDH propylene supply is expected to tighten, but downstream profits are under pressure and follow - up may be limited. Pay attention to device dynamics. - Inter - period: None. - Inter - variety: None. [2] 2. Core Viewpoints - The expected de - capacity of the South Korean petrochemical industry's naphtha cracking boosts propylene prices. South Korea's propylene capacity accounts for 6% of the global total. From January to July this year, China imported 863,000 tons of propylene from South Korea, accounting for 67.6% of total imports, and 73.7% in 2024. South Korea's petrochemical de - capacity may support overseas propylene prices. - On the supply side, the maintenance of Shandong Zhenhua PDH continues, and Qingdao Jinneng and Wanhua Penglai PDH are shut down for maintenance. The PDH start - up rate has declined month - on - month, and the external release of propylene has tightened, which supports the price in the short term. However, downstream profits are under pressure at high prices, and procurement is cautious, so the upward space for propylene prices may be limited. - On the demand side, the overall downstream start - up rate has rebounded. The start - up rate of octanol has increased significantly, and the PP start - up rate has increased slightly. The start - up rate of acrylic acid has declined significantly. In the short term, demand is supported, but its sustainability is questionable. - On the cost side, the crude oil price has stopped falling and then fluctuated upward, and the landed price of the propane outer market has rebounded, so the cost - side support has shifted upward. [2] 3. Summary by Directory 3.1 Propylene Basis Structure - The closing price of the propylene main contract is 6491 yuan/ton (+21), the spot price of propylene in East China is 6450 yuan/ton (+25), the spot price of propylene in North China is 6455 yuan/ton (-45), the basis of propylene in East China is - 41 yuan/ton (+4), and the basis of propylene in North China is - 36 yuan/ton (-66). [1] 3.2 Propylene Production Profit and Start - up Rate - The propylene start - up rate is 75% (+1%), China's propylene CFR - Japanese naphtha CFR is 193 US dollars/ton (-3), and propylene CFR - 1.2 propane CFR is 97 US dollars/ton (+1). [1] 3.3 Propylene Import and Export Profits - The propylene import profit is - 263 yuan/ton (+3). [1] 3.4 Propylene Downstream Profits and Start - up Rates - PP powder start - up rate is 40% (+1.29%), production profit is - 55 yuan/ton (+75); epoxy propane start - up rate is 74% (+2%), production profit is - 383 yuan/ton (-86); n - butanol start - up rate is 89% (+0%), production profit is 336 yuan/ton (+589); octanol start - up rate is 92% (+6%), production profit is 430 yuan/ton (-18); acrylic acid start - up rate is 70% (-5%), production profit is 446 yuan/ton (-18); acrylonitrile start - up rate is 73% (+1%), production profit is - 572 yuan/ton (+56); phenol - acetone start - up rate is 78% (+1%), production profit is - 727 yuan/ton (+0). [1] 3.5 Propylene Inventory - The in - plant inventory is 40,320 tons (+3470). [1]