Propylene Pricing Assessment

• U.S.–China Trade Tariff Dispute (April 2025): In April 2025, escalating trade tensions between the United States and China led to the imposition of tariffs as high as 125% on various goods, including petrochemicals like propylene. As both countries are significant players in the production and consumption of propylene and its derivatives (e.g., polypropylene, acrylonitrile, and propylene oxide), the tariffs disrupted trade flows, introduced high costs, and created uncertainty in global markets. These factors led to volatility in propylene prices, especially in Asia and North America. 
• Russia–Ukraine War & European Energy Crisis (2022–2023): The conflict between Russia and Ukraine caused severe disruptions in natural gas and crude oil supplies across Europe. As propylene is often produced through steam cracking and refinery processes—both energy-intensive—the reduced availability and high cost of feedstocks drove up production costs. Additionally, some European plants curtailed operations or shut down temporarily, tightening supply and causing propylene prices to surge. 
• Post-COVID Manufacturing Rebound (2021–2022): Following the easing of pandemic restrictions, global manufacturing activity rebounded rapidly. Propylene demand spiked due to its widespread use in consumer goods, automotive parts, packaging, and textiles. However, supply chains were still recovering, and many petrochemical facilities faced labor shortages or logistical delays. This imbalance between recovering demand and limited supply led to sharp price increases, particularly in Asia and the Americas. 
• 2020 Crude Oil Crash & Cracker Rate Cuts: During the early months of the COVID-19 pandemic, crude oil prices plummeted, leading many steam crackers and refineries to cut operating rates or shut down entirely. Since propylene is largely derived from these processes, global supply shrank significantly. Meanwhile, demand for certain propylene-based products, like medical-grade plastics and packaging, remained resilient or grew—contributing to market tightness and upward price pressure. 
• China’s Environmental Crackdown (2017–2018): China implemented strict environmental regulations aimed at reducing pollution, forcing numerous chemical and refining facilities to scale back or halt operations. These measures significantly impacted the production of propylene and its derivatives. As China is a major global producer and consumer, this regulatory shift led to regional supply shortages and drove up prices, particularly in the Asia-Pacific region. 

These events highlight the sensitivity of the Propylene market to geopolitical tensions, weather disruptions, and shifts in supply-demand dynamics, underscoring the importance of monitoring global trends.