PO Market Focus: Polyurethane Materials Markets Went Up Together

In recent two weeks, the the propylene oxide (PO) and polyether polyol jumped. Since August 8, the PO market continued the uptrend and the total increase was RMB 3,300/mt, up 31.7%. Influenced by the environmental protection, safety supervision, unexpected units shutdown and tight supply of limestone all stimulated the PO market.      

Downstream users were cautious when purchasing in previous days. With the supply declining and prices increasing, the demand got stronger. Traders barely had inventory and most of them stopped giving offers.

The polyether polyol market was satisfactory. Since August 8, CNOOC and Shell Petrochemicals, Wanhua Chemical and Zibo Dexin Lianbang Chemical Industry had stopped offering. The market price hit over RMB 14,000/mt, which was up 26.1%.

Prices for the related product, TDI, boomed by RMB 8,000/mt from early August, which was up 26.2%. The downstream sponge producers saw high production cost pressure and the market was chaos. The price for MDI also increased by 4.7%. The polyurethane market boomed in this traditional offseason.

Behind the crazy increasing markets, tight supply was the major reason. Environmental protection supervision, long-term maintenance, and unexpected shutdown stimulated the market. However, the prices may have reached the highest level. In September, the PO and polyether markets may slide, because the soft demand and resistance to high prices.