August 20 news
This week, the overall propylene oxide market in China showed a narrow and slightly weak consolidation trend. After a significant price increase last week, the market entered a phase of digesting the price increase this week, with prices fluctuating narrowly and slightly weakly around the 10,000 CNY per ton mark. According to the monitoring system, as of August 20th, the benchmark price for propylene oxide was 9,900.00 CNY per ton, an increase of 7.61% compared to the beginning of the month (9,200.00 CNY per ton).
On the raw materials front, cost support remains strong. Prices of upstream raw materials—propylene and liquid chlorine—continue to stay relatively high, while international oil prices have remained resilient, influenced by geopolitical factors and other drivers, collectively underpinning a solid cost floor for propylene oxide. According to monitoring systems, as of August 20, the benchmark price of propylene stood at 8,834.33 CNY per ton, up 11.44% from the beginning of this month (7,927.67 CNY per ton).
Supply side: The current market supply remains tight. Multiple plants, including Zhenhai Phase 2, Guoen, Qixiang, Lianhong, and Weixing, are still shut down, with the industry capacity utilization rate maintaining at a relatively low level of around 59%-60%. However, there is no new significant reduction in supply this week. Although the shipping from operating factories is moderate, there is no overall pressure on shipping for now.
Demand side: The downstream sector shows a clear resistance to high-priced raw materials. Terminal demand is insufficient, with the downstream mainly focusing on digesting previous inventories or following contractual needs. New orders are limited, and the overall market trading atmosphere is weak.
Comprehensive forecast: The short-term market is expected to continue a pattern of high-level competition and narrow-range fluctuations. Positive factors include low spot inventory, low operating rates, and strong cost support; negative factors are the difficulty in passing on high prices to downstream, and weak demand. Additionally, attention should be paid to the potential increase in supply from the resumption of some maintenance facilities later on.
