This week, the Chinese propylene oxide market shows a significant downward trend

April 21 news

This week, the Chinese epichlorohydrin market showed a significant downward trend. The main reason is the concentrated release after the previous high price increase, coupled with the gradual recovery of supply-side facilities leading to an oversupply in the market, as well as insufficient new orders and cautious purchasing on the demand side. According to the monitoring system, as of April 21, the benchmark price of epichlorohydrin was 11,100 CNY/ton, a decrease of -9.76% compared to the 1st.

Raw Material Side: Recently, the spot market for propylene—the key raw material—has shown divergent trends. In Shandong, spot prices edged slightly higher compared to the previous trading day, as buyer demand has picked up somewhat following the bottoming out of prices. However, Huifeng Petrochemical in Shandong lowered its ex-factory quote by 100 CNY/ton to 8,950 CNY/ton, indicating that increased supply or weak demand is putting downward pressure on spot prices. Overall, propylene—as a raw material—continues to provide cost support for propylene oxide. According to monitoring systems, as of April 21, the benchmark price for propylene stood at 9,057.67 CNY/ton, representing a 3.11% increase from the beginning of this month (8,784.33 CNY/ton).

On the supply side: Earlier supply-side positives have faded, and maintenance units are gradually resuming operations. High profits are encouraging enterprises to raise their operating rates to 90%, causing the market to shift from tight to loose. Furthermore, expectations of new capacity coming online and existing facilities resuming production are putting additional downward pressure on prices, leading to a significant drop in propylene oxide market prices this week.

On the demand side: Weak downstream demand is weighing on propylene oxide prices. After prices rose earlier, new orders from downstream customers have declined, leading to reduced procurement demand for propylene oxide. Around April 20, polyether companies mostly adopted a wait-and-see attitude, with most transactions limited to replenishing essential inventories only, resulting in a subdued trading atmosphere.

Spot Market Trend Analysis:

According to SpotCom data, the 10-day moving average of propylene oxide prices has crossed below the 20-day moving average, indicating that prices have entered a downward channel.

Considering the five-level positioning, the current price remains at a one-year high, leaving significant room for further decline.

Comprehensive Forecast: According to propylene oxide analysts, pessimistic market sentiment continues to intensify in the short term, and prices are expected to remain under downward pressure. Unless there are major unexpected plant shutdowns or favorable policy developments in the near future, propylene oxide prices may continue their weak and consolidating trend. We recommend paying close attention to changes in the facility utilization rate on the supply side as well as the purchasing pace of downstream polyether products.