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[Industry Focus]：Epoxy propane prices bottomed out, the market rebound or continued downturn?

Read： 473 Time：4weeks ago Source：Jin Lianchuang

Market dynamics in early 1.: tight supply and steadily rising prices

in the early days of August, the propylene oxide market showed a delicate balance between supply and demand. As in stock circulation continues to be tight, downstream companies are forced to adopt a more aggressive procurement strategy to meet production demand, which directly drives the smooth discharge of propylene oxide plants. In the face of such a market situation, manufacturers generally adopted a firm price strategy, making the market transaction price rise steadily. However, it is worth noting that although propylene Oxide Price there has been an increase, but the efficiency of demand transmission within the industrial chain is not ideal, resulting in a relatively moderate increase.

2024年国内环氧丙烷市场走势图.jpg

At the same time, the equipment maintenance plans of Qixiang Tengda, Huntsman and other enterprises have had a certain impact on the market. However, due to Qixiang Tengda's early adjustment of sales strategy and reduction of in stock export, coupled with sufficient inventory of downstream factories in East China, these maintenance did not have a significant impact on the market. On the contrary, in the context of the continued downturn in downstream new single transactions, the market mentality began to differentiate, and some investors chose to take profits, resulting in a short-term stagflation in the process of rising market prices.

Mid -2. Market Turn: Supply Increase and Price Diving

in mid-August, the supply and demand pattern of the propylene oxide market has undergone significant changes. With Shandong Sanyue, Tianjin Bohua, Yangnong Ruiheng and other enterprises to resume production, as well as the steady increase of China Shipping fine load, the market supply increased rapidly. At the same time, the recovery of demand on the eve of the peak season was far from meeting market expectations, which led to a rapid imbalance between supply and demand in the market, and the price of propylene oxide thus opened a channel for rapid decline.

Under the psychological effect of buying up and not buying down, end customers generally adopt a wait-and-see attitude, waiting for the price to fall further before purchasing. This risk aversion has further exacerbated the downward trend of the market, making the price of propylene oxide fall significantly in a short period of time. Despite the heavy profit loss of the new process and the price close to the cost line, the market still lacks effective demand support to prevent the price from continuing to decline.

Market outlook for late 3.: prices bottoming out and rebound expectations

at present, the price of propylene oxide has set a new annual low, and the market supply and demand relationship is still in an unbalanced state. However, from another point of view, this also foreshadowed the subsequent development of the market. As prices continue to fall, some producers are beginning to face loss pressure, which may prompt them to take measures such as reducing production or stopping production to stabilize market prices. At the same time, downstream companies may also increase their purchases to replenish inventories after seeing prices fall to low levels.

In addition, we also need to pay attention to some potential market changes. For example, if the downstream supporting devices of enterprises such as Lihua Yiweiyuan and Longhua Polyether can be put into operation smoothly in September and increase the demand for propylene oxide, then this will bring a significant positive boost to the market. At the same time, changes in the cost side may also have an impact on market prices. If the profit loss situation of HPPO, PO/SM and other processes continues to deteriorate and causes some producers to withdraw from the market or adjust their production strategies to reduce cost pressure, then this may bring some support to the propylene oxide market.

Source: Jin Lianchuang

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