Price trend

This week, the propylene oxide market witnessed a sharp downward trend. This decline was the result of a confluence of multiple factors: a concentrated correction following excessive price surges in the preceding period; an oversupply in the market caused by the sequential resumption of production facilities; and weak downstream demand characterized by a shortage of new orders and cautious purchasing behavior. According to data from the SunSirs monitoring system, as of April 21, the benchmark price for propylene oxide stood at 11,100 RMB/ton—a decrease of 9.76% compared to the price recorded on the 1st of the month.

Market Analysis

Raw Materials: Recently, trends in the propylene spot market—a key cost component—have diverged. In Shandong, spot prices edged up slightly compared to the previous trading day, as buying interest among market participants rebounded following a price bottom-out. However, Shandong Huifeng Petrochemical lowered its ex-factory quotation by 100 RMB/ton to 8,950 RMB/ton, signaling that either increased supply or sluggish demand is exerting downward pressure on spot prices. Overall, raw material propylene continues to provide cost support for propylene oxide. According to data from the SunSirs monitoring system, as of April 21, the SunSirs benchmark price for propylene stood at 9,057.67 RMB/ton—an increase of 3.11% compared to the beginning of the month (8,784.33 RMB/ton).

Supply Side: The bullish factors previously supporting the supply side have dissipated. Maintenance shutdowns at various facilities have concluded, and operations are gradually resuming; furthermore, high profit margins have incentivized producers to boost operating rates to 90%, shifting market conditions from tight to loose. Looking ahead, expectations of new capacity additions and further production restarts have exerted additional downward pressure on prices, resulting in a significant decline in propylene oxide market prices this week.

Demand Side: Weak downstream demand is weighing on propylene oxide prices. Following a previous price surge, new orders from downstream sectors have declined, resulting in diminished purchasing demand for propylene oxide. Around April 20, most polyether manufacturers adopted a wait-and-see attitude, limiting their procurement primarily to restocking for immediate operational needs; consequently, trading activity remained subdued.

Market outlook

Analysts at SunSirs specializing in propylene oxide believe that, in the short term, bearish market sentiment continues to intensify, and prices are expected to remain under pressure. Barring any subsequent major unplanned plant shutdowns or favorable policy stimuli, propylene oxide prices are likely to maintain a trend of weak consolidation. It is recommended to pay close attention to changes in operating rates at production facilities on the supply side, as well as the purchasing pace of downstream polyether manufacturers.

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