Price trend

In December 2025, the domestic propylene oxide market exhibited a trend of "volatile upward movement followed by a correction and then a rebound." According to the monitoring system of SunSirs, as of December 31st, the benchmark price of propylene oxide was 7,733.33 RMB/ton, a decrease of 0.22% compared to December 1st. The core market dynamics revolved around the supply-demand interplay between the release of new production capacity and the phasing out of older facilities, coupled with the dual constraints of fluctuating propylene prices and weak downstream demand, resulting in price fluctuations exhibiting distinct phases.

In early December, the propylene oxide market showed a steady upward trend, with prices gradually rising from 7,750 RMB/ton at the beginning of the month to 8,166.67 RMB/ton, a cumulative increase of 5.38%.

Raw materials: At the beginning of the month, propylene prices remained at a high level of 6,180.75 RMB/ton, providing fundamental support to the cost side. According to the monitoring system of SunSirs, as of December 12th, the benchmark price of propylene was 6,220.75 RMB/ton, an increase of 0.65% compared to the beginning of the month (6,180.75 RMB/ton).

On the supply side, the market supply of goods had tightened temporarily due to some small and medium-sized enterprises accelerating their inventory reduction efforts.

Downstream polyether factories started restocking and were actively purchasing, with order volumes increasing by approximately 15% compared to the end of November. Wanhua Chemical had also increased its external procurement efforts, further alleviating supply pressure. Mainstream factories had consequently raised their ex-factory prices by 100-150 RMB/ton, and the market transaction price continued to rise.

Entering mid-December, the propylene oxide market experienced increased production capacity but weak demand, leading to downward pressure on prices. As of December 24th, the price had gradually fallen from 8,166.67 RMB/ton (December 12th) to 7,850 RMB/ton, representing a cumulative decrease of 3.88%.

Raw materials: Propylene prices were falling continuously. As of December 31st, the benchmark price of propylene according to the SunSirs was 5,711.00 RMB/ton, a decrease of 7.6% compared to the beginning of the month (6,180.75 RMB/ton). Cost support had weakened. 

Supply side: Lanhong Gerun's 300,000 tons/year PO plant started production ahead of schedule on December 10th. Coupled with the release of other new production capacity in the Shandong region, the tight supply situation in the market had eased significantly, and company inventories had recovered to 46,000 tons.

Demand side: Downstream PP powder operating rates had fallen to a low of 37%. Polyether companies reduced their procurement volume by 30% due to weak orders from the end-use building materials and home furnishings sectors, only maintaining small-scale purchases for essential needs. Factories in both the north and south were selling at low prices to reduce inventory, further suppressing market sentiment.

In late December, the propylene oxide market experienced a "volatile rebound driven by supply and demand dynamics," with prices rising from 7,850 RMB/ton to 8,050 RMB/ton, an increase of 2.55%.

Raw materials: Propylene prices continued their downward trend, resulting in weak cost support.

Supply side: On December 22nd, Lianhong Gerun's PO plant officially produced qualified products, theoretically adding 800 tons of daily supply, initially triggering bearish sentiment in the market. However, a large factory in northern China temporarily shut down due to environmental rectifications, affecting 500 tons of daily production, creating a counterbalancing effect on the supply side. The northern factory took this opportunity to significantly increase its ex-factory price by 200 RMB/ton, driving up spot prices.

Demand side: Downstream companies had limited acceptance of high-priced raw materials, with a new order conversion rate of less than 40%. There was strong resistance to price increases, and the market quickly entered a stalemate after prices rose, resulting in a weaker trend towards the end of the month.

Market outlook

According to SunSirs' propylene oxide analyst, the weak trend in the propylene market, a key raw material, provided limited support for propylene oxide prices, restricting manufacturers' ability to raise prices. On the supply side, the release of new production capacity was occurring alongside the phasing out of older facilities, leading to increased industry concentration but a short-term oversupply. Downstream industries were generally facing negative profit margins and were primarily purchasing only to meet immediate needs, making it difficult to sustain price increases. It is expected that the propylene oxide market will mainly operate in a stable to slightly stronger range in the future, with more attention needed on raw material prices and changes in market supply and demand.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.