In August, China's propylene oxide market showed a trend of first declining then rising

August 31, News

In August, the Chinese epichlorohydrin market showed a trend of first declining and then rising, with market prices falling again towards the end of the month. According to the monitoring system, as of August 29, the benchmark price for epichlorohydrin was 7,600 CNY/ton, a decrease of 4.4% compared to August 1.

Price influencing factors:

On the raw materials front: In August, propylene prices fluctuated, providing only limited cost support for propylene oxide and failing to exert significant upward pressure on its production costs. According to market analysis systems, as of August 28, the benchmark price for propylene stood at 6,633.25 CNY per ton, representing a 3.11% increase compared to the beginning of the month (6,433.25 CNY per ton).

Supply side: In the first half of the month, due to the resumption of Qixiang Tengda's 300,000 tons/year facility, the market supply increased to around 19,000 tons, with the spot circulation volume increasing to 11,500 tons. At the same time, terminal demand weakened, and downstream mainly focused on digesting previous orders, leading to a decline in prices from their high levels. At the end of August, Shida Shenghua's propylene oxide facility was shut down for maintenance. Some factories in Shandong region had smooth shipments, with tight inventories, and there was a positive sentiment for pushing up the propylene oxide market.

On the demand side: In early August, downstream terminal demand for propylene oxide remained insufficient, as most industries were still focused on working through previous orders, leading to diminished purchasing enthusiasm. However, in late August, industries such as polyether and propylene glycol saw a temporary surge in restocking needs, which helped support a rebound in prices. As the month drew to a close, market demand weakened again, causing propylene oxide prices to decline.

Future Market Prediction:

Epoxypropane analysts believe the market supply remains ample, while raw material prices offer limited support. Downstream demand is weak, leading to a subdued trading atmosphere. As a result, the epoxypropane market is expected to trend downward in the near term. Market participants should pay closer attention to fluctuations in raw material prices and shifts in downstream supply and demand dynamics.