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[Industry Focus]：Behind the decline in the propylene oxide market: a double-edged sword of oversupply and weak demand

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In mid October 1., the price of epoxypropane was weak.

In mid-October, at home propylene Oxide Market Price as the market expected, showing a weak operating situation. This trend is mainly affected by the steady increase in the supply side and the weakness of the demand side.

The supply side of the 2. is steadily higher, and the demand side is as warm as water.

Recently, Sinopec Tianjin, Shenghong Hongwei, Wanhua III and Shandong Xinyue and other enterprises load increase, significantly increased the market supply of propylene oxide. Although Shandong Jinling parking maintenance, Dongying Huatai reduced negative operation, but because these enterprises have inventory sales, so the overall domestic epoxy propane supply showed a steady trend. However, the demand side was not as strong as expected, leading to a weak game between supply and demand, and the price of propylene oxide fell as a result.

The problem of 3. profit inversion is becoming more serious, and the price decline is limited.

As the price of propylene oxide falls, the problem of profit inversion becomes more and more serious. Especially in the three mainstream processes, the original profit situation is relatively healthy chlorohydrin technology, but also began to appear a substantial profit loss. This has led to a limited decline in the price of propylene oxide, which has fallen relatively slowly. East China was affected by the Huntsman in stock low-cost bidding, price confusion, negotiations down, continue to refresh the annual low. In Shandong, due to the centralized delivery of pre-orders by some downstream factories, the purchasing enthusiasm for propylene oxide is acceptable and the price is relatively stable.

Late 4. market price expectations and break points

in late October, propylene oxide manufacturers are actively seeking market breakpoints. The northern factory inventory more pressure-free operation, under strong cost pressure, the price mentality gradually heated up, trying to drive downstream demand through price increases to follow up. At the same time, China's export container freight index has fallen sharply, and it is expected that the export constraints of downstream and terminal products will gradually shrink and the export volume will gradually increase. In addition, the support of the Double Eleven is also cautiously optimistic about the terminal domestic demand situation. It is expected that in the second half of the year, end customers will have the behavior of choosing a low demand for replenishment.

5. future price trend forecast

combined with the above factors, it is expected that the price of cyclopropene will rise slightly in late October. However, in view of the end of the month, Shandong Jinling will be put into operation, and the overall demand environment is weak, the sustainability of the demand side follow-up is not expected to be optimistic. Therefore, even if the price of propylene oxide rises, its space will be limited, and it is expected to be around 30-50 yuan/ton. Subsequently, the market may turn to stable shipments, the end of the price is expected to fall.

In summary, in mid-October, the domestic propylene oxide market showed a weak operating trend under the weak supply and demand game. The future market will be affected by multiple factors, the price trend is uncertain. Manufacturers need to pay close attention to market dynamics and flexibly adjust production strategies to respond to market changes.

Source: Jinlianchuang Subscription Number

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