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Insight | Time: Dec 24 2021 4:51PM
Review of PP Market in 2021
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Price trend


In 2021, the overall China domestic PP granule market shows an "M" trend, with two price peaks throughout the whole year, the first peak in early March and the second in mid-October, which is the highest since 2019.


In mid-to-late February, PP prices rose sharply. On the one hand, it was related to the rising futures, on the other hand, many foreign plants shut due to the extreme weather. The short-term mismatch of supply and demand caused imported PP market to rise sharply. China domestic export arbitrage window opened, and RMB spot prices rose accordingly.


In September, PP price surged, mainly due to the rapid transmission of the dual control policy in the market at the end of August, the price driving factor transferred from supply and demand to cost, and the cash flow of each production process was in full loss, especially in coal-based PP and methanol-based PP.




Sources of propylene Region Company Capacity 锛圞TA锛 Startup time
oil-based Northeast China Haiguolongyou #1 200 2021.2
oil-based Northeast China Haiguolongyou #2 350 2021.3
MDH North China  Dongming Hengchang Chemical 200 2021.3
oil-based North China  Sinopec Tianjin Lianhe II 200 2021.5
PDH East China Oriental Energy II #1 400 2021.5
PDH East China Oriental Energy II #2 400 2021.6
oil-based Central China Sinopec-SK (Wuhan) PC #3 300 2021.6
oil-based South China Fujian Gulei Petrochemical 350 2021.8
oil-based Northeast China PetroChina Liaoyang PC  (capacity enlargement) 300 2021.8
PDH North China  Qingdao Jineng Technology I 450 2021.9
Total 3150

From the perspective of new start-ups, it鈥檚 still a year of rapid expansion of production capacity in 2021. Although the new production capacity is not as good as the 3.8 million tons/year in 2020, the new capacity still exceeds 3 million tons/year, reaching 3.15 million tons/year and the total production capacity reaches 31.405 million tons/year. It is reported that the 450kt/year PP plant #1 of Zhejiang Petroleum & Chemical II has been trial-run in the near future, and it is expected to start commercial production at the end of December/early January.


In terms of distribution area, the production of the new PP plant is mainly concentrated in Northeast China (850kt/year), North China (850kt/year) and East China (800kt/year)., and there is no new production capacity in Northwest and Southwest regions.

Cash flow


Production process PP granule PP powder
oil-based coal-based MTO PDH imported propylene Shandong propylene
2019 1859.26 1416.38 391.37 2017.74 387.47 207.59
2020 2526.19 626.81 565.41 1824.11 146.12 95.47
2021 1098.54 -1700.41 -894.49 702.35 -51.84 -72.24

Judging from the cash flow of each production process, the cash flow of PP has been significantly affected by the rising cost of raw materials in 2021. As of Dec 22, only oil-based PP made profits. From the annual average level, the cash flow of oil-based PP and propane dehydrogenation-based PP remained profitable, but it has shrunk significantly compared with that of 2020, while others have basically turned negative.

[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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