SunSirs: The Propylene Glycol Market Fell to the Bottom in Shock in 2022-Ⅰ

Price trend

According to the monitoring data of SunSirs, as of December 7, 2022, the reference average ex factory price of domestic industrial propylene glycol was 7,766 RMB/ton. Compared with January 1, 2022 (the reference price of propylene glycol was 16,400 RMB/ton), the price decreased by 8,634 RMB/ton, or 52.64%.

Analysis review

In 2022, the domestic propylene glycol market experienced "three rises and three falls", and each rise was followed by a more violent fall. The following is a detailed analysis of the propylene glycol market trend in 2022 from three stages:

Phase I (the first rise and fall 1.1-5.10)

In January 2022, after the New Year's Day holiday, propylene glycol plants in some parts of China resumed operation, the on-site supply of propylene glycol increased, and the downstream demand was insufficient. The propylene glycol market fell under pressure, with a decline of 4.67% in January. After the Spring Festival in February, the market stock of propylene glycol was low, and downstream stores were stocked after the festival. Supported by supply and demand, propylene glycol rose to a high on February 17, and the market price was around 16,900 RMB/ton. It rose 12.37% in early February.

In the face of high prices, the wait-and-see mood of downstream increased, the pace of stocking slowed down, and the propylene glycol inventory was under pressure. Since late February, the propylene glycol market started to run from a high level and fell. In March and April, due to special factors, downstream demand of propylene glycol continued to be weak, transportation in many places in China was limited, supply and demand circulation was slow, and the gravity of propylene glycol continued to decline. Until early May, the propylene glycol market had fallen for nearly 80 consecutive days. On May 10, the market price of propylene glycol was 11,116 RMB/ton, down 32.22% compared with the beginning of the year.

Phase II (the second rise and fall 5.11-8.08)

Since the middle and late of May, the propylene glycol market had welcomed favorable support in terms of exports. With the increase of export orders, the overall supply pressure of propylene glycol in the field had eased, and the offer of propylene glycol factory had started to rise steadily. In June, the export advantage continued to support the upward focus of propylene glycol. On June 19, the propylene glycol market price was near 14,133 RMB/ton, up 25.44% compared with May 11.

In late June, the propylene glycol export was calm, the domestic demand support was general, and the propylene glycol supply side was gradually under pressure. In addition, the raw material propylene oxide market declined, and the cost support was also loosed, the propylene glycol market entered the downward channel again. Under the constant negative pressure, propylene glycol fell all the way down to the first ten days of August. On August 8, the market price of propylene glycol fell to about 7,366 RMB/ton, less than half of the market price at the beginning of the year, with a drop of 55.08% compared with the beginning of the year.

Phase Ⅲ (the third rise and fall 8.09-12.07)

In the middle and late August, the propylene glycol market experienced a recovery from the trough. Export orders increased. The tight supply of propylene glycol and increased costs supported the upward movement of the propylene glycol market. On September 18, the propylene glycol market price was 10,333 RMB/ton.

In the middle and late September, with the weakening of raw materials and the loosening of cost support, and after the propylene glycol price broke through 10,000 RMB/ton, the turnover of new orders turned weak, and the propylene glycol market price fell again. After the National Day, "silver October did not appear", and the demand was insufficient. Under the pressure of the accumulated warehouse shipment at the supply side, and under the intensification of the contradiction between supply and demand, propylene glycol continued to hit the bottom. As of December 7, the market price of propylene glycol was 7766 RMB/ton, a decline of 52.64% in 2022.

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