China's Propylene Oxide Market Prices Show a High-Level Correction (2.2-2.6)

February 9 news

This week, as the main units that were under maintenance gradually restarted, the overall operating rate of the industry increased, and the market supply volume rose, leading to a significant correction in the price of Chinese propylene oxide. According to the monitoring system, as of February 6th, the benchmark price of propylene oxide was 7,800 CNY/ton, a decrease of -4.88% compared to February 1st.

On the raw material side: The price of propylene, a key raw material, has seen a slight increase, providing moderate cost support for propylene oxide. According to monitoring systems, as of February 6, the benchmark price of propylene stood at 6,437.67 CNY per ton, up 0.52% from the beginning of this month (6,404.33 CNY per ton).

Supply side: With the completion of previous maintenance, new production capacities have been 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, have been 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 with supply recovery coupled with the off-season for demand, the market is shifting from tight supply to a more relaxed situation, causing prices to fall rapidly. It is expected that epoxy propane prices will likely remain weakly stable in the short term. Further attention should be paid to raw material prices and changes in market supply and demand.