# Polypropylene: Cycles

The PP-propylene spread and China's export push

Source page: https://www.materialinsights.org/chemicals/polypropylene/cycles/

The PP-propylene spread and China's export push What this tab covers How its prices and margins move: past booms and busts with price levels, the spread or margin that the industry watches, the drivers of the cycle and the metrics to track.

PP margins are set by the PP-propylene spread and by Chinese capacity. China added 17 Mt of PP in five years and became an exporter, so Asian prices have sat near Chinese cash cost since 2023. The floor is the cost of non-integrated or PDH-based Chinese producers, who cut runs when spreads go negative; the ceiling comes from shocks such as the 2021 Texas freeze and the 2026 Hormuz disruption. India's prices carry a premium over Far East Asia because it relies on Gulf cargoes; that premium widened to about $160/t in Sep 2026 (Polymerupdate).
 The spread to watch **PP minus propylene (about 1.0 t per t)**

Non-integrated producers need about $120-200/t over propylene to cover conversion (indicative). The China spread was about $75/t in H2 2025 (propylene tile) and negative in Sep 2026 when Far East PP raffia ($1,120-1,160/t) was below CFR China propylene ($1,165-1,175/t) (Polymerupdate).

#### Booms and busts

1. 2020-2021

Covid demand for nonwovens and packaging plus the February 2021 Texas freeze kept PP and PDH margins very high.

US PDH variable margins above $1,600/t at times in 2020-2024 (propylene tile, S&P Platts); PP levels not retrieved

2. 2023-2025

Chinese PP and PDH overbuild drove record Chinese PP exports and pushed Asian and Indian prices down.

homo-PP CIF India $935-965/t, lowest weekly average since mid-January (Dec 2024, ChemOrbis); China PP-propylene spread about $75/t in H2 2025 (propylene tile)

3. April-May 2025

China's tariffs on US propane rose to 125% then fell to 10%, disrupting PDH feed and PP run rates (propylene tile).

US share of China propane imports fell from 60.6% to 31.4% (propylene tile)

4. March-September 2026

The US-Iran conflict disrupted Hormuz from 28 Feb; Gulf PP cargoes to India stalled. Prices spiked in March, eased by July and rose again in September.

PP raffia CFR South Asia $810/t (7 Jan) to $915/t (25 Feb) to $1,380/t (18 Mar 2026) (Platts); CFR India raffia/injection $1,080-1,110/t (15 Jul) then $1,280-1,330/t (9 Sep 2026) (Polymerupdate)

#### What drives the cycle

- **Chinese capacity and exports.** China added 17 Mt in five years; its export volumes set Asian prices in normal times.
- **Propane and naphtha prices.** PDH margins depend on propane, cracker propylene on naphtha; tariff swings on US propane hit Chinese PDH in 2025.
- **Gulf supply and Hormuz.** More than half of India's PP imports come from the Middle East (S&P Global 2026).
- **Auto, appliance and packaging demand.** Injection and compound grades follow car and white-goods output; raffia follows cement, fertiliser and grain.
- **Recycled-content rules.** Mandates for rigid packaging create demand for recycled PP, which is less developed than rPET.

#### Metrics to track

| Metric | Why it matters | Where to track it |
|---|---|---|
| **PP raffia and BOPP CFR India** | Import parity for Indian converters | Polymerupdate, Platts, ChemOrbis |
| **PP minus propylene spread (China)** | Shows margin pain and likely run cuts | Platts, Mysteel |
| **Dalian PP futures** | Live Chinese sentiment | Dalian Commodity Exchange |
| **Reliance PP list prices** | Domestic price setter | Polymerupdate |
| **Chinese PP exports** | Signals pressure on Asian markets | China Customs, Argus |

## Other sections

- [Summary](https://www.materialinsights.org/chemicals/polypropylene/index.md)
- [Overview](https://www.materialinsights.org/chemicals/polypropylene/overview/index.md)
- [Correlation](https://www.materialinsights.org/chemicals/polypropylene/correlation/index.md)
- [Production route](https://www.materialinsights.org/chemicals/polypropylene/routes/index.md)
- [Production](https://www.materialinsights.org/chemicals/polypropylene/production/index.md)
- [Feedstocks](https://www.materialinsights.org/chemicals/polypropylene/feedstocks/index.md)
- [Trading](https://www.materialinsights.org/chemicals/polypropylene/trading/index.md)
- [Movement](https://www.materialinsights.org/chemicals/polypropylene/movement/index.md)
- [Regulation](https://www.materialinsights.org/chemicals/polypropylene/regulation/index.md)
- [Characteristics](https://www.materialinsights.org/chemicals/polypropylene/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/chemicals/polypropylene/emissions/index.md)
- [Relationships](https://www.materialinsights.org/chemicals/polypropylene/links/index.md)