Propylene oxide prices have recently shown an upward trend. SunSirs data indicates that as of January 28, 2026, the reference price for propylene oxide stood at 8,200 yuan per ton, marking a 6.26% increase compared to the beginning of the month. This follows a joint announcement by the Ministry of Finance and the State Taxation Administration, which stated that starting April 1, 2026, the VAT export tax rebate for 249 products, including polyether, will be abolished.

A research report by BOC Securities indicates that the elimination of the VAT export tax rebate policy for polyethers will prompt enterprises to advance export orders, thereby increasing demand for polyethers and subsequently boosting propylene oxide consumption. In the short term, the propylene oxide market is expected to continue operating under tight supply and demand conditions.

The domestic propylene oxide market continues to face tight supply, with industry inventories remaining low and spot circulation constrained. On the demand side, driven by the cancellation of the polyether export tax rebate policy, downstream polyether enterprises are actively ramping up production. Combined with domestic restocking demand, market trading activity remains robust. Zhuochuang Information believes that while domestic propylene oxide prices have risen, the anticipated increase in supply is gradually materializing. Coupled with heightened caution among downstream buyers, buying interest at elevated levels has cooled significantly. Short-term market transaction prices may decline, though the overall price center is expected to remain elevated. This week's domestic propylene oxide average price is projected around 8,200 yuan/ton, with the primary trading range estimated between 8,000-8,400 yuan/ton.

Industry Chain and Enterprise Overview

I. Upstream Production Segment of the Propylene Oxide Industry Chain

Binhai Chemical: Engaged in the R&D, production, and sales of basic chemical products such as propylene oxide and caustic soda. As a major supplier to the propylene oxide market, its products flow into downstream processing segments like polyether manufacturing. Operations are influenced by adjustments to polyether export tax rebate policies and fluctuations in propylene oxide prices.

Wanhua Chemical: Leveraging an integrated chemical industrial chain, it engages in propylene oxide production. Internal synergies ensure stable raw material supply, contributing to the propylene oxide market supply system.

Hongbaoli: The company integrates propylene oxide and polyether polyol production while also engaging in external propylene oxide sales and polyether polyol processing. Its operations span both upstream and downstream segments of the industrial chain, making it directly affected by adjustments to the polyether export tax rebate policy.

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