The Propylene prices in the USA have significantly rebounded during January 2025 on the back of restocking activity and trade disruption. Concurrently, the increase in the feedstock crude oil prices has further surged the manufacturing costs during this timeframe which supported the market trend.

Key takeaways:

• The Propylene prices have increased significantly due to severe weather-related shutdowns in the Gulf Coast.
• Reduced supply, increased demand, and supply chain disruptions are major factors contributing to the price hike.
• Rising Propylene costs will likely impact various industries and consumers through increased production costs due to a surge in feedstock crude oil prices.

As per ChemAnalyst, the Propylene prices in the USA are expected to sustain an uptrend in February 2025 as well amid an expensive export from the USA due to severe weather-related shutdowns.

In December 2024, Propylene prices in the USA experienced a downward trajectory. This decline was attributed to persistent overcapacity in the market and sluggish demand. Export volumes fell short of expectations, forcing producers to resort to price reductions and offloading excess inventory through secondary market channels.

Despite the bleak December outlook, a notable shift occurred in January 2025. Propylene prices witnessed a sharp rebound of 9.5% in just a few weeks of the New Year to settle on 24th January 2025 due to supply disruption amid unexpected shutdowns and high production costs due to a surge in feedstock crude oil prices.

The market anticipated a potential uptick in demand in the new year, driven by seasonal factors and the impact of colder weather on production. Several major plants have been forced offline, including steam crackers at BASF/TotalEnergies, INEOS, LyondellBasell, and Equistar. These facilities represent a significant portion of the region's Propylene production capacity, and their temporary closure is expected to create a supply crunch.

Furthermore, the storm has caused operational issues and flaring events at other Propylene production sites, including LyondellBasell's Channelview complex and Enterprise's Propylene dehydrogenation (PDH) units.

Additionally, the market remained cautious about potential weather-related disruptions in production on the Gulf Coast. The significant disruptions caused by Winter Storm Enzo in the Gulf Coast's petrochemical industry have had a direct and substantial impact on Propylene prices. The widespread shutdowns of production facilities due to extreme weather conditions have created a supply chain bottleneck, leading to a noticeable increase in Propylene costs.

Furthermore, global developments pose significant risks. The possibility of trade policy changes under the new US administration, including potential tariffs on imports from countries like Mexico and China, could disrupt supply chains and increase costs for imported polymers and feedstocks, further impacting market dynamics.