Buying interest among propane dehydrogenation operators in China has increased ahead of a summit between U.S. President Donald Trump and Chinese President Xi Jinping scheduled for Thursday and Friday, with market participants citing growing uncertainty surrounding potential trade policy developments.
The talks are expected to focus on both the ongoing Middle East conflict and bilateral trade relations, with both countries in a fragile tariff truce since last year.
Sources noted that the main driver behind the recent increase in buying interest was concern over the potential for renewed trade tensions and tariffs following the talks.
Several market participants said expectations for a meaningful trade resolution are low, prompting buyers to secure cargoes early and build inventories to reduce exposure to potential trade disruptions.
OPIS tracked at least five buy tenders issued this week by Chinese importers, including Ningbo Kingfa and Tianjin Bohai, seeking June-delivery propane cargoes.
China-based sources also noted that the buying interest comes at a time of improved PDH margins, mainly due to stronger domestic propylene prices, which recently rose to around 9,500 yuan per metric ton ($1,399) to 9,800 yuan/mt.
Improved production economics have encouraged some operators to consider restarting units that were previously shut for maintenance.
For example, Tianjin Bohai is eyeing a June restart for its 600,000 mt/year PDH unit which has been offline for maintenance since late last year.
The recent buying spree follows a period of muted activity in China's PDH sector, where operating rates fell to around 55% in April as several operators shut units amid tight feedstock availability, OPIS reported earlier.
Market analysts now expect that PDH operating rates could recover to an estimated low-60% range in May should current buying interest continue.
This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.
--Reporting by Cheryl Lee, clee@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com
(END) Dow Jones Newswires
05-13-26 0354ET
