China’s Propylene Oxide Market Prices Show a Significant Pullback

January 22nd, News

This week, as the main facilities that were previously under maintenance gradually resumed operations, the overall operating rate of the industry increased, and the market supply volume rose, leading to a significant correction in the prices of propylene oxide in China. According to the monitoring system, as of January 22, the benchmark price for propylene oxide was 8,133.33 CNY per ton, an increase of 5.17% compared to January 1.

On the raw material front: After a rapid rise in propylene prices in early January, the pace of price increases slowed down—or even fluctuated—during the mid-to-late part of the month, thereby weakening the cost support for propylene oxide. According to monitoring systems, as of January 22, the benchmark price of propylene stood at 6,134.33 CNY per ton, up 7.29% from the beginning of the month (5,717.67 CNY per ton).

Supply side: With the completion of previous maintenance, new production capacities are being released. This week, major facilities that were under maintenance (such as some in East China) have gradually restarted, increasing the overall operating rate of the industry and boosting market supply. Additionally, new capacities from companies like Binhua and Wanhua, which underwent maintenance in December, are being gradually released in January, further increasing the market supply.

On the demand side: Downstream polyether companies largely completed their concentrated stockpiling in mid-to-late January, in preparation for the Spring Festival and the policy window period (before the cancellation of export tax rebates). As a result, new orders have been insufficient. Moreover, with the Spring Festival approaching, downstream enterprises have become less active in procurement, leading to a sluggish market atmosphere and weak demand performance.

Market Forecast: Epoxy Propane analysts believe that this round of price decline reflects a typical “supply increase, demand decrease” scenario. With supply recovering and demand entering the off-season, the market has shifted from tightness to looseness, naturally putting downward pressure on prices. It is expected that epoxy propane prices will remain generally stable with a slight downward trend in the short term. Further attention should be paid to changes in raw material prices and shifts in market supply and demand.