Price trend

In the latter half of January 2026, the Shandong propylene glycol market showed overall weakness, exhibiting a V-shaped trend with an initial sharp decline followed by a weak rebound. The market downturn was primarily driven by three factors: weakening raw material costs, persistently weak demand, and supply pressure. After losing key support, prices accelerated their decline, reaching a historical low. The continuous price drop led to a slight increase in shipments from some companies, and coupled with a marginal stabilization in costs, the market saw a tentative rebound after inventory reduction. However, the lack of demand prevented a reversal of the overall weak market sentiment.

According to SunSirs' commodity price analysis system, as of January 29th, the average price of propylene glycol in Shandong province was 5,933 RMB/ton, representing a decrease of 1.39% during the period.

Analysis of Core Driving Factors

Supply side: Abundant supply became the norm, and pressure on supply continued to persist

Recently, the operating rate of propylene glycol plants in Shandong has fluctuated within a narrow range, with the average operating rate remaining at around 73%. Overall supply was sufficient, and there was ample supply of goods in the market. As the Chinese New Year holiday approaching, some factories planned to schedule maintenance or reduce production in advance, which may lead to a slight decrease in supply. However, this will only alleviate short-term pressure and will not reverse the overall oversupply situation. The actual operating status of leading enterprises' facilities needs to be continuously monitored.

Demand side: Essential demand was lacking, and downstream support was comprehensively insufficient

The downstream demand for propylene glycol was concentrated in unsaturated polyester resins, coatings, and polyethers. Currently, it is the traditional off-season, with the operating rate of the unsaturated polyester resin industry below 40%. Companies are mainly focused on depleting existing inventory, and there is weak demand for bulk purchases. Other downstream demands, such as coatings and polyethers, have not shown any significant recovery, with only sporadic restocking to meet immediate needs. Although there has been a slight increase in exports, Southeast Asian buyers are strongly pushing for lower prices, primarily seeking low-priced sources, making it difficult to drive up overall domestic prices. Therefore, demand is not providing any upward momentum to the market.

Cost side: Core raw material prices were weakening, and cost support had completely collapsed

Propylene oxide is a core raw material for propylene glycol, accounting for 70%-85% of its cost, and its price fluctuations directly determine the cost base of propylene glycol. In the first half of January, the price of propylene oxide briefly surged before quickly falling back. On January 29th, the benchmark price reported by SunSirs fell to 8,200 RMB/ton, a decrease of 5.02% during the period, significantly weakening cost support. Furthermore, many leading companies in the propylene glycol industry have their own propylene oxide production facilities, with a self-sufficiency rate exceeding 80%, eliminating the cost advantage of purchasing raw materials externally and further exacerbating downward price pressure.

Future market outlook

As the Spring Festival holiday approaching, businesses are gradually suspending operations and closing for the holidays. The inventory stocking cycle is largely complete, with only sporadic replenishment of essential supplies at the retail level. There is no significant increase in demand to support the market, and most businesses are focused on reducing inventory and collecting payments. Market sentiment remains cautious. It is expected that propylene glycol prices will fluctuate at low levels before the holiday, and attention should be paid to the supply situation of production facilities in the market.

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