Last week, the domestic propylene oxide market generally exhibited a trend of narrow-range fluctuation and weak trading activity. Price movements were limited, market participants maintained a strong wait-and-see stance, and the dynamic interplay between upstream and downstream sectors was clearly evident. According to data from the SunSirs monitoring system, as of May 22, the SunSirs benchmark price for propylene oxide stood at 9,200 RMB/ton—a decrease of 10.39% compared to May 1.

Raw Materials: Last week, spot supplies of the raw material propylene were relatively ample, and refinery shipments proceeded at a steady pace; consequently, prices retreated slightly, causing the cost-side support for propylene oxide to soften somewhat. Meanwhile, liquid chlorine prices remained relatively stable—holding at generally low levels—which helped alleviate overall production cost pressures for propylene oxide. The absence of significant price swings in the raw materials sector meant that propylene oxide lacked strong cost-driven momentum, making it difficult to sustain a continuous upward price trend. Overall, the market primarily tracked the minor adjustments in raw material prices, with cost factors exerting only a weak influence on market direction. According to data from the SunSirs monitoring system, as of May 22, the benchmark price for propylene stood at 9,134.33 RMB/ton—a decrease of 3.79% compared to the beginning of the month (9,494.33 RMB/ton).

Supply Side: Last week, overall domestic supply of propylene oxide remained stable. A number of production units maintained routine operations, with few facilities undergoing maintenance; consequently, the industry-wide operating rate stood at a moderate level. Shipments from certain integrated enterprises proceeded smoothly, and the circulation of regional supplies remained normal; however, a few manufacturers, facing inventory pressure, offered moderate price concessions to facilitate sales. Regionally, supply was ample in the major production hubs of Shandong and East China; enterprises in these areas experienced neither significant inventory backlogs nor any notable shortages. Overall, the supply side last week saw no concentrated production cuts or sudden equipment malfunctions. With market supplies remaining abundant, the prevailing loose supply-demand landscape remained unchanged, exerting significant downward pressure on prices.

Demand Side: Downstream polyether polyol manufacturers are primarily engaging in rigid, need-based procurement. Recently, downstream end-use sectors—such as home furnishings, upholstered furniture, and automotive interiors—have experienced lackluster operating rates and insufficient order volumes; consequently, polyether producers are purchasing strictly on an as-needed basis and are reluctant to build up substantial inventory. Demand from smaller downstream segments, such as fine chemicals and pharmaceutical intermediates, remains stable but is limited in volume, making it insufficient to drive overall market demand. Overall, downstream players show little willingness to chase rising prices, largely adopting a "buy-as-you-go" procurement strategy. Market trading activity remains sluggish; while lower-priced supplies are moving relatively smoothly, transactions involving higher-priced goods are struggling to gain traction. This weakness on the demand side has directly resulted in a lack of upward momentum in the propylene oxide market.

According to analysts at SunSirs specializing in propylene oxide, the market last week was characterized primarily by weak, fluctuating trends, driven by a confluence of three factors: limited support from raw materials, stable and ample supply, and subdued downstream demand. In the short term, the scope for price fluctuation in the raw material—propylene—remains limited; furthermore, there are currently no indications of significant supply-side contractions, while the recovery of downstream end-market demand remains sluggish, leaving the market devoid of positive catalysts. Consequently, the propylene oxide market is expected to continue its pattern of narrow-range consolidation in the near term, with significant price swings unlikely. Moving forward, key areas of focus will include trends in upstream raw materials, operational updates at production facilities in major regions, and shifts in operating rates within the downstream polyether industry; the market is expected to remain dominated by the interplay between supply and demand.

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