Zheshang Securities says domestic PDH units returned to profitability since
June. PDH margins have turned positive and the long-term profitability baseline
is likely to move higher, while the long-term propane price baseline is expected
to trend lower. Propylene-equivalent consumption is forecast to grow steadily at
about a 3% CAGR. Supply-side dynamics: co-produced (byproduct) propylene volumes
have fallen, implying a structural long-term supply contraction; industry supply
growth has slowed sharply, supporting an improved supply-demand balance. Monitor
integrated, low-cost leaders with PDH capacity.
