Price trends

This week, the propylene oxide market generally exhibited a trend of narrow, slightly bearish consolidation. Following the sharp surge seen last week, the market entered a phase of digesting those gains, with prices fluctuating within a narrow range near the 10,000 RMB/ton mark. According to the SunSirs monitoring system, the benchmark price for propylene oxide stood at 9,900.00 RMB/ton as of August 20, representing a 7.61% increase compared to the beginning of the month (9,200.00 RMB/ton).

Market Analysis

On the raw material front, cost support remains robust. Prices for upstream raw materials—propylene and liquid chlorine—are holding at relatively high levels; meanwhile, international oil prices remain firm due to factors such as geopolitics, collectively reinforcing the cost floor for propylene oxide. According to the SunSirs monitoring system, as of August 20, the benchmark price for propylene stood at 8,834.33 RMB/ton, marking an 11.44% increase compared to the beginning of the month (7,927.67 RMB/ton).

Supply side: Market supply remains tight. Several production units—including Zhenhai Phase II, Guo'en, Qixiang, Lianhong, and Satellite—remain offline, keeping the industry's capacity utilization rate at a relatively low level of around 59%-60%. However, there has been no further significant reduction in supply this week; while shipments from active plants have been lackluster, there is currently no overall pressure to move inventory.

Demand side: Downstream resistance to high-priced raw materials is evident. Follow-through in end-user demand is insufficient; downstream activity is largely focused on consuming existing inventories or fulfilling contract orders on an as-needed basis. New order volumes are limited, and the overall market trading atmosphere remains subdued.

Market Outlook

In the short term, the market is expected to maintain a pattern of high-level tug-of-war and narrow-range fluctuation. Bullish factors include low spot inventories, low operating rates, and strong cost support; bearish factors include difficulties in passing high prices on to downstream sectors and sluggish demand follow-through. Additionally, attention should be paid to potential supply increases resulting from the restart of certain units currently undergoing maintenance.

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