August 12 news
This week, the Chinese propylene oxide market showed a downward trend from a high level. According to the monitoring system, as of August 12, the benchmark price of propylene oxide was 9,066.67 CNY/ton, a decrease of -1.45% compared to the beginning of this month.
Raw Material Side: Cost-side support has strengthened. This week, international oil prices have fluctuated and risen amid geopolitical disruptions, while the price of propylene—a key raw material—has continued to climb, closing at 8,340 CNY/ton on August 11, up 150 CNY/ton from the previous day. However, the propylene oxide industry remains in a state of loss, with the chloroprene process recording an average weekly integrated profit of -357.44 CNY/ton. High costs coupled with declining sales prices are creating a double squeeze. According to monitoring systems, as of August 12, the benchmark price for propylene stood at 8,251.00 CNY/ton, representing a 4.08% increase compared to the beginning of this month (7,927.67 CNY/ton).
Supply side: There are frequent fluctuations in the operation of facilities. Multiple plants, including Zhenhai Phase 2, Guoen, Yida, Qixiang, Lianhong, and Satellite, are currently shut down. On August 11, the capacity utilization rate of propylene oxide in China was only 60.25%. Previously, Tianjin Petrochemical slightly increased its load, and the Ruiheng and Wanhua plants restarted at low load, but the increase in output has been slow and scattered, resulting in limited growth in market supply.
Demand side: The core reason for the price drop this week is the poor downstream transmission. The polyether market is in a phase where the off-season and peak season overlap. Although the previous supply benefits of the raw material, propylene oxide, pushed prices up, the high prices have dampened the enthusiasm of downstream buyers. Downstream buyers are reducing their purchases and resisting high prices, leading to a subdued trading atmosphere.
Comprehensive forecast: In the short term, the strong operation of propylene, the raw material, will still support the cost side, but the downstream demand is weak and there is still resistance to high prices. The market may continue to consolidate in the near term. Close attention should be paid to plant maintenance activities and changes in the procurement pace of downstream customers in China.
