According to SunSirs, the propylene glycol market in the second half of August saw prices initially rise before stabilizing, followed by a period of fluctuation with a downward bias. As of August 27, the average ex-factory price of propylene glycol in the Shandong region stood at 9,733 RMB/ton, up 5.04% from the middle of the month.

Key Drivers

Cost Side: Propylene oxide prices surged and then retreated; while there is still a floor supporting the price, there is no strong momentum to drive a significant rally.

After surging in mid-August, the price of the feedstock propylene oxide gradually weakened, loosening cost-side support; however, given the cost floor inherent in the propylene value chain, propylene glycol is unlikely to experience a precipitous drop—costs will primarily serve to provide a price floor rather than drive a new round of increases.

Supply Side: Concentrated restarts of units undergoing maintenance and increased supply volumes are exerting downward pressure on prices.

With the restart of certain units, the overall operating rate for domestic propylene glycol has rebounded, creating supply-side pressure. Simultaneously, DMC co-production units are steadily generating propylene glycol as a by-product, further boosting market availability. However, some facilities—such as those in Yulin (Shaanxi), Tongling (Anhui), and Hunan Zhongchuang—remain offline, providing a buffer against excessive supply. Overall, the volume of goods circulating in the market has risen compared to the previous period; manufacturer offers faced resistance after an initial surge, the spread between high and low prices has widened, and the market has shifted from a "scramble for stock" to a model of negotiating deals on a case-by-case basis.

Demand side: It is the traditional summer off-season; purchasing is driven primarily by immediate needs, with no proactive restocking.

In the downstream sectors—specifically unsaturated polyester resins and alkyd resins, which are the largest areas of consumption—demand for end-use construction materials and composite products is weak. Consequently, factory operating rates remain low, and downstream buyers are limiting purchases to essential requirements. While demand from the personal care, pharmaceutical, and food sectors remains steady and inelastic, these segments account for a limited share of the total market and are insufficient to drive overall demand. Exports show some resilience and help absorb a portion of supply; however, with the recovery of overseas production facilities, export growth is limited and cannot reverse the trend of the domestic off-season.

Market Outlook:

Short-term outlook: Propylene glycol prices are fluctuating within a weak range; conditions for a sharp rally are lacking, while cost support prevents a steep decline, resulting in a market driven primarily by range-bound trading.

- Bullish factors: A rebound in propylene oxide prices, sudden concentrated plant maintenance, and export orders exceeding expectations.

- Bearish factors: Continued release of supply, sluggish downstream operating rates, and an accumulation of producer inventories.

- Key signals: If major producers continue to lower ex-factory quotes, spot price levels will drift lower; if concentrated maintenance triggers only a temporary rebound, the upside potential will be limited.

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