Introduction: As September is more than halfway over, downstream demand for unsaturated polyester resin (UPR) remains persistently weak. Buyers are resistant to the continuously rising prices of raw materials and continue to adhere to a procurement strategy based solely on essential needs. Although some raw material prices experienced volatility and pullbacks this week, they remain at overall high levels. Consequently, UPR market prices have seen limited declines, with narrow fluctuations in pricing space.
The UPR market has recently shown an upward trend amid volatility. Upstream raw materials such as styrene, maleic anhydride, phthalic anhydride, ethylene glycol, and dicyclopentadiene have all seen significant price increases, with rises of 9.58%, 22%, 15.48%, 20.98%, and 12.35%, respectively. While these costs provide strong support for the UPR market, the sustained price hikes have triggered "price anxiety" among downstream users. Inventory holders generally maintain a strategy of holding firm to market trends, pushing sell-side price centers higher. However, the transmission of high costs to downstream sectors remains inefficient. Downstream purchasing pace has slowed, leading to a continuous contraction in high-price transactions within the week and a generally sluggish trading atmosphere. Driven by rising costs, price centers in both East China and South China markets have shifted notably higher. Nevertheless, due to blocked cost transmission and lagging downstream follow-up, purchases are limited to essential needs, resulting in fewer high-price transactions and a prevailing wait-and-see attitude. Currently, spot prices for UPR in East China have risen to approximately 11,200 RMB/ton, an increase of 900 RMB/ton from the beginning of the month, representing a gain of 8.74%.
According to data from Chempricehub, the average gross production profit for the domestic UPR industry stood at -382 RMB/ton as of the latest update, a month-on-month decrease of 250 RMB/ton, reflecting a drop of 189.38%. The average market price for a specific domestic UPR grade in East China was 10,807 RMB/ton, up 9.75% month-on-month. On the raw material side, the average price of styrene in East China was 10,230 RMB/ton, up 3.89% month-on-month. Both the average UPR market price and styrene prices rose month-on-month; however, since the increase in UPR prices did not exceed the rise in production costs, the UPR industry continued to suffer losses.
On the demand side, against the backdrop of the current global macroeconomic environment, the typical peak season consumption is noticeably weaker than usual, and the traditional "Golden September" rally has failed to materialize. Changes in downstream demand remain a key focus for the market. In the fiberglass terminal sector, orders at some production bases improved slightly upon entering September. However, the persistent rise in resin prices has led to transactions dominated by small-volume, need-based purchases, with little opportunity for stockpiling due to the difficulty in locking in raw material inventory costs. While there are certain positive expectations for the future, they are unlikely to serve as drivers for boosting the UPR market. Regarding raw materials, the styrene market is expected to trade sideways at high levels with a slight downward bias next period, with its price center potentially shifting lower. Overall, supply-demand imbalance persists in the industry. Coupled with declining profits for UPR producers, operating rates remain at low loads. With the upcoming National Day and Mid-Autumn Festival holidays, most UPR plants will undergo concentrated shutdowns or load reductions, which may help consume existing spot inventories to some extent. However, if raw material prices continue to drift lower and downstream orders show little improvement, the UPR market faces the possibility of a pullback after recent gains.
In summary, short-term fundamentals for the UPR market offer limited momentum. Styrene prices upstream are fluctuating, while the rise in maleic anhydride prices is encountering resistance, suggesting that cost support may weaken. The peak season effect in end-user demand has yet to appear, and market confidence in future demand remains insufficient. Additionally, new UPR capacities are scheduled to come online in October and November, intensifying long-term competitive pressure. Downstream segments are exercising caution in raw material procurement, leaving the market without sufficient bullish support. Therefore, the UPR market is expected to consolidate at high levels in the short term.
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