September 10 news
This week, the Chinese epichlorohydrin market showed a fluctuating upward trend. According to the monitoring system, as of September 10th, the benchmark price of epichlorohydrin was 11,000 CNY per ton, an increase of 14.58% compared to the beginning of the month.
On the raw material front: Crude oil and propylene are jointly driving prices upward, with strong cost support. Geopolitical tensions in the Middle East continue to escalate, pushing Brent crude oil futures settlement prices up to $101 per barrel. The broad-based rise in international crude oil prices has boosted propylene prices. All production routes for propylene oxide are currently operating at a loss, yet companies remain firmly committed to raising prices, and the cost side is playing a significant role in underpinning price levels. According to monitoring systems, as of September 10, the benchmark price for propylene stood at 9,884.33 CNY per ton, representing a 10.10% increase compared to the beginning of this month (8,977.67 CNY per ton).
Supply side: The concentration of maintenance and proactive production cuts has led to a tight supply of spot goods. Currently, the capacity utilization rate for propylene oxide in China is only about 64%, with multiple plants such as Zhenhai Phase 2, Qixiang, Satellite, and Guoen still shut down. In August, the total loss from maintenance remained at a high level of around 220,000 tons, causing industry inventory to drop to low levels. Producers generally limited their sales, and some supplies from Shandong were sold at a premium in the East China market.
Demand side: A gentle follow-up in the "Golden September," but resistance to high prices still exists. The overall operating rates of downstream polyether enterprises in China are not high, and there is a clear resistance to high-priced raw materials, with most purchases being small orders based on immediate needs. However, large companies like Wanhua Chemical continue to purchase externally, and with the marginal boost from the traditional peak season of "Golden September and Silver October," demand has somewhat recovered compared to the off-season in August, but the acceptance of continuously rising prices remains limited.
Comprehensive Forecast: Several refining units are expected to resume operations around mid-September. Once the anticipated increase in supply materializes, the tight spot-market situation will gradually ease. Moreover, given that demand continues to exhibit the characteristic of being “not strong despite the peak season,” further downstream follow-up efforts will be increasingly constrained if prices remain persistently high. We expect the current strong market conditions to continue in the short term, but mid-to-late September will bring a critical test as supply starts to rise. It is crucial to closely monitor the progress of refinery restarts and any changes in geopolitical premiums on the crude oil front.
