SunSirs: With Costs Collapsing, Propylene Glycol Was Downward Under Pressure

Price trend

According to monitoring data from SunSirs, during the latter half of April, the propylene glycol market exhibited high-level volatility with a gradual downward shift in its price center. The primary factors driving this trend were easing production costs and weak demand; however, tight spot supply served to limit the extent of the decline. As of April 29, the average production price for propylene glycol in the Shandong region stood at 10,633 RMB/ton, marking a cumulative decline of 7% over the two-week period.

Fundamental Analysis

Cost Side: Propylene oxide (PO) had retreated from its high levels, resulting in weakened support

With geopolitical tensions easing and PO supplies recovering, prices have retreated; over the reporting period, the price of propylene oxide (PO)—as tracked by SunSirs—fell by over 11.5%, causing cost support for propylene glycol to weaken.

Supply Side: Operating rates had rebounded; spot supply remained tight, though incremental volume was limited

Domestic Operations: Industry operating rates have rebounded from below 60% to the 65–70% range, as units previously undergoing maintenance gradually resume operations. Inventory: Factory inventories remain at low levels, while trader inventories are not high; manufacturers continue to demonstrate a willingness to hold up prices.

Demand Side: Essential demand remained stable, while high prices dampened purchasing activity

Unsaturated Resins: Essential demand remains steady; however, downstream buyers are cautious about accepting shipments at current high price levels, resulting primarily in small-volume, needs-based orders and limited overall demand growth. Lithium-ion Battery Electrolytes: Demand is well-supported, and long-term contracts remain stable; nevertheless, high prices are dampening enthusiasm for spot market purchases. Polyether Polyols: The market is sluggish, and supplies are ample; manufacturers are offering lower prices to stimulate orders, yet buyers remain reluctant to commit.

Market outlook

Overall, it is highly probable that propylene glycol prices will remain in a high-level, narrow-range fluctuation pattern in the short term. However, as cost support continues to weaken—compounded by various pressures such as high prices dampening purchasing activity—prices will gradually face downward correction pressure. Consequently, the medium-to-long-term price center is likely to drift slowly lower; therefore, close attention should be paid to trends in raw material markets.

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