Report Industry Investment Rating - Not provided Core View of the Report - The domestic propylene futures market is facing dual pressures of continuous capacity expansion and weak downstream demand, with an imbalanced supply - demand fundamental. The price of propylene futures is expected to maintain a weak and volatile pattern in the short term, and the real improvement of the fundamentals requires the appearance of an inventory inflection point [2][6] Summary by Relevant Catalogs Supply Situation - China's propylene production capacity is in a rapid expansion cycle. In 2024, the total production capacity reached 70.44 million tons/year with a utilization rate of 76.6%. In 2025, over 5 million tons of new capacity is expected to be released. The PDH process is the main force for expansion, but most PDH plants face cost pressures and operate at a low utilization rate. In October 2025, the output was 5.476 million tons, a month - on - month increase of 5.2% and a year - on - year increase of 15.77%, and the capacity utilization rate was 74.0% [2] - Import profit is in a continuous inversion state, suppressing import volume. Although there is some room for export growth, the overall export volume remains stable, and domestic supply mainly depends on domestic demand [3] Inventory Situation - The port inventories in major distribution centers such as Shandong and East China are on an upward trend, and the social total inventory is estimated to be around 1.8 million tons. The inventory - to - consumption ratio is rising, and the production enterprise's in - plant inventory is also at a historical high. Downstream factories adopt a low - inventory strategy, which intensifies the upstream shipment pressure [3] Demand Situation - Although the downstream production capacity of propylene is growing, the terminal demand recovery is far below expectations, showing a "weak in peak season" situation. Downstream enterprises are mostly in a loss state, with low acceptance of high - priced raw materials and only maintaining rigid demand [3] - The performance of downstream products is differentiated. PP has relatively stable operating rates, but the profitability of different production routes varies greatly. Epoxy propane, butanol - octanol, and phenol - acetone are in losses, while acrylic acid and esters are profitable. Overall, the downstream's willingness to purchase propylene is severely suppressed [4] Macro - factor Influence - The end of the US government "shutdown" and the reduced probability of a Fed rate cut in December have weakened the macro - optimistic expectations for propylene futures. The market focus has returned to the industrial fundamentals, and the propylene futures price is more likely to be dragged down by the fundamentals [4][5]