[Chemical Knowledge]：What are the factors influencing the price of polymer-grade propylene? Detailed analysis, what is the use of polymer-grade propylene?

1. the fundamental impact of supply and demand

As an important raw material for the petrochemical industry, the price of polymer-grade propylene is primarily affected by the relationship between supply and demand. The supply of propylene mainly comes from processes such as petroleum cracking, refining by-products and propane dehydrogenation. Changes in supply directly affect market prices, such as when production equipment in major producing countries breaks down or is routinely overhauled, market supply decreases and prices may rise. On the demand side, propylene is widely used in the production of chemical products such as polypropylene, acrylonitrile and propylene oxide, and fluctuations in demand for these downstream products are directly transmitted to the propylene market, which in turn affects its price.

2. raw material cost fluctuations

The main raw materials for the production of propylene include petroleum and propane, and their price fluctuations will also significantly affect the price of propylene. Oil price is the focus of the global market, which is affected by geopolitics, OPEC policy, international economic situation and other factors. Higher oil prices will push up the cost of propylene production, thereby raising its market price. Similarly, the price of propane is affected by supply and demand and seasonal factors (such as increased heating demand in winter), which will also have a knock-on effect on the price of propylene.

3. production processes and technological advances

Different production processes and technical levels determine production efficiency and costs. The traditional petroleum cracking and refining by-product processes have certain cost and energy consumption problems, while the emerging propane dehydrogenation (PDH) process has higher raw material conversion and lower energy consumption, so it can produce propylene at a lower cost. If the new process is widely used in the market and the supply of propylene increases, its price may decrease. Advances in process technology will also improve product quality and reduce the proportion of other products, thus affecting the market price structure.

4. seasonal factors

Seasonal demand changes in the propylene market also affect prices. For example, in summer and winter, due to different energy demand, oil and natural gas extraction and processing activities are frequent, and changes in these upstream activities will affect the production and supply of propylene. There are also seasonal changes in the demand for downstream plastic products. For example, the increase in demand for polypropylene in the peak season of automobile manufacturing in summer will push up the price of propylene.

5. macroeconomic environment

The macroeconomic environment is also an important factor affecting propylene prices. The slowdown in global economic growth will lead to a decline in demand for petrochemical products, which in turn will affect the demand and price of propylene. Conversely, rapid economic growth will drive up demand and raise prices. Macroeconomic indicators such as exchange rate fluctuations and changes in inflation rates also indirectly affect propylene prices by affecting import and export costs and market expectations.

6. Policies and Regulations

National environmental policies and industry regulations have an important impact on the production and use of propylene. Strict environmental regulations may increase the production cost of enterprises, thus pushing up the price of products. Government subsidies, tariff policies and market access regulations for the petrochemical industry will also have an important impact on the balance of supply and demand and price formation of propylene. For example, China's environmental protection requirements for propylene production enterprises continue to increase, prompting enterprises to increase investment in environmental protection, thereby affecting production costs and market prices.

7. market competition pattern

The competitive landscape of the propylene market directly affects the price level. The number of producers in the market and their market share determine the intensity of market competition. If there are several large producers in the market with a major market share, prices may be more stable. But if barriers to entry are low, new producers keep pouring in and supply increases, prices may be suppressed. Price wars between producers also have a direct impact on market prices.

8. Emergencies Impact

Emergencies, such as natural disasters, major accidents, political conflicts, etc., often have a significant impact on the propylene market. For example, the new crown epidemic in 2020 led to a significant reduction in global economic activity, a sharp drop in oil demand and a collapse in oil prices, which in turn affected propylene prices. Similarly, geopolitical conflicts in major production regions, such as the Middle East, can lead to supply chain disruptions, affecting market supply and prices.

9. Inventory and Logistics

Propylene inventory levels and logistics conditions are also important factors affecting prices. When inventory levels are low, market concerns about tight supply will push up prices. In terms of logistics, transportation costs, transportation capacity and sudden logistics bottlenecks will affect the timeliness of propylene supply and price fluctuations. For example, strikes at ports, increases in shipping costs, etc. may have an impact on the market price of propylene.

10. and other foreign goods market demand and utilization

The market demand and utilization of other products will also have an impact on prices. Non-standard products are propylene products that fail to meet the standard quality requirements, and their prices are usually lower than those of qualified products. The scope of utilization and demand for such foreign goods directly affect their market price. If there is a wide range of applications for foreign products, market demand is stable, and their prices will be relatively strong; however, if demand shrinks or substitutes emerge, their prices may fluctuate significantly.

The price of polymer-grade propylene-and other foreign products is affected by a combination of factors, including supply and demand, raw material costs, production processes, seasonal factors, macroeconomic environment, policies and regulations, market competition, emergencies, inventory logistics and market demand. The analysis of these factors and their interaction is of great significance for understanding and predicting the price trend of propylene market.