Post-holiday, China's propylene oxide prices slightly increase

October 10, news

After the holiday, the price of propylene oxide in China has risen slightly. According to the monitoring system, as of October 10, the benchmark price of propylene oxide was 7866.67 CNY/ton, an increase of 1.29% compared to October 1.

Price influencing factors:

On the raw material front, propylene prices showed a "first decline followed by a rise" trend around the Double Festival period. At the beginning of the holiday, the resumption of operations at Zhenhua and Jineng's PDH units led to increased supply, putting downward pressure on propylene prices. However, when Hebei Haiwei and Lihua Yiwai halted production, supply tightened, prompting prices to rebound sharply. After the holidays resumed trading, planned plant maintenance activities and stronger downstream procurement demand continued to push bid prices higher. As of October 10, the benchmark price for propylene stood at 6,588.25 CNY per ton, up 0.69% from the beginning of the month (6,543.25 CNY per ton). This upward movement in propylene prices has provided some support to the propylene oxide market.

Supply side: After the holiday, the supply of propylene oxide in China has tightened. The suspension of sales by Lihuayi Weiyuan, coupled with the maintenance of major factories in Shandong, has led to a reduction in the circulation of spot goods, and the low inventory levels of manufacturers have pushed up the price of propylene oxide. In the future, attention should be paid to the recovery from maintenance of various manufacturers, as well as the inventory digestion pace of Qixiangda and the progress of the new capacity release of Wanhua's Phase IV. It is expected that the price of propylene oxide will be more likely to rise than to fall in the near term.

On the demand side: After the holiday, downstream polyether companies have largely maintained rigid demand procurement, with a strong wait-and-see attitude. Polyether producers have limited flexibility in adjusting their operating rates, while propylene glycol manufacturers are gradually increasing their loads. Overall, demand remains steady and subdued.

Market Forecast:

Analysts of propylene oxide believe that the main reason for the rebound in propylene oxide prices is the cessation of sales by Lihuayi Weiyuan and the maintenance of major factories in Shandong, leading to a tightening of supply. There is also some support from the prices of raw materials, but downstream polyether demand is mainly characterized by rigid procurement, with a strong wait-and-see attitude. It is expected that the propylene oxide market will be more likely to rise than fall later, and more attention needs to be paid to the changes in raw material prices and market supply and demand.