SunSirs: Propylene Oxide First Rose and Then Stabilized in June

Price trend

The upward trend of propylene oxide market prices in June was the main trend, and the prices were stabilizing towards the end of the month. According to the monitoring system of SunSirs, as of June 27th, the benchmark price of SunSirs's propylene oxide in Shandong Province was 7,666.67 RMB/ton, an increase of 4.4% from the beginning of the month.

Price influencing factors:

Supply side: At the beginning of the month, the inventory of propylene oxide in the market was tight, which provided strong support for the rise in propylene oxide prices. As of the 18th, only the 200,000 tons/year PO/SM unit of Shenghong Petrochemical had resumed normal operation at 70-80% load, while the remaining Wanhua Phase III, Satellite Petrochemical, and Sinopec Changling units were planned to resume gradually from the weekend to the end of the month. The expected increase in volume during the month was limited, and the initial inventory during start-up was expected to be low.

Raw material side: The rising market price of raw material propylene provided strong support for the cost of propylene oxide. According to the market analysis system of SunSirs, as of June 26th, the benchmark price of propylene in SunSirs was 6,838.25 RMB/ton, an increase of 4.59% compared to the beginning of this month (6,538.25 RMB/ton).

Demand side: The downstream market purchased propylene oxide in urgent need, with limited new inquiries and cold terminal demand. Therefore, it was mainly a wait-and-see approach. Downstream demand for polyether was not fluctuating significantly, with rigid procurement being the main focus and some incremental procurement. The demand of propylene glycol was general, but some factories may resume production in the later stage, and there may be an increase in demand. Overall, there was still some support from the demand side for the propylene oxide market, and the market may experience narrow consolidation in the later stage.

Market outlook

An propylene oxide analyst from SunSirs believes that the supply of propylene oxide was tight, but the equipment gradually resumed at the end of the month, and the tight inventory situation was alleviated. The market price was consolidated and the downstream market entered the off-season with weak demand, passive follow-up, limited new inquiries, and a wait-and-see attitude. It is expected that the propylene oxide market will mainly experience narrow consolidation in the later stage, and more attention should be paid to changes in raw material prices and downstream supply and demand.

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