SunSirs: With Cost Support Weakening, Propylene Glycol Gradually Drifted Downward from High Levels

Price Trend

According to SunSirs Spot Market Watch: During the first half of April, the propylene glycol market exhibited a trend characterized by an initial surge followed by a gradual decline from a high plateau. Prices rose sharply at the beginning of the month; however, under the dual pressures of collapsing production costs and weakening supply-demand fundamentals, prices edged downward during the latter half of the period. As of April 16, the average ex-factory price for propylene glycol in the Shandong region stood at 11,433 RMB/ton, representing a cumulative increase of 10.65% over the half-month period.

Fundamental Analysis

Supply Side: Maintenance shutdowns at various domestic propylene glycol facilities were gradually concluding, leading to a rebound in operating rates; however, overall supply remained relatively tight, manufacturers demonstrated a strong inclination to uphold prices, and spot market supplies were scarce.

Demand Side: Downstream demand for unsaturated resins remained steady, driven by essential needs; however, high price levels have made downstream buyers cautious regarding inventory intake, with purchasing activity largely limited to small-volume orders for immediate requirements. Consequently, overall demand growth remained limited. The spot market for polyether polyols continued to exhibit a weak trend, characterized by ample supply; some manufacturers were offering lower prices to stimulate sales, yet overall market willingness to follow suit remained low. Demand for lithium-ion battery electrolyte solvents continued to provide some underlying support, with long-term contract orders remaining relatively stable; nevertheless, elevated price levels were exerting a dampening effect on spot market purchasing activity.

Cost support weakened: In early April, market concerns regarding Middle East geopolitics and rising oil prices drove up the price of propylene oxide, which in turn triggered a speculative rally in propylene glycol. By mid-April, as geopolitical risks marginally eased and propylene oxide supplies recovered, market sentiment shifted toward caution; propylene oxide was the first to undergo a correction, while propylene glycol—bolstered by a tight supply-demand balance—lagged behind in its pullback. Propylene glycol prices have moved entirely in lockstep with the cost transmission from propylene oxide.

Market Outlook:

In the short term, the propylene glycol market is expected to continue exhibiting a pattern of high-level, narrow-range fluctuation; the probability of significant price surges or declines remains low. Market participants should closely monitor fluctuations in propylene oxide prices, shifts in supply-side dynamics, and changes in downstream demand. Should persistently high prices continue to dampen downstream purchasing enthusiasm, the market may face pressure for a minor price correction.

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