Supply: During the week, Shida, Sanyue, and others returned to normal full-load operation; Xinyue and Ruiheng ran at slightly reduced load; Levima released a small volume. Total output for the period was 117,400 tonnes, up 2,300 tonnes from the previous period. Capacity utilization was 62.66%, up 1.19 percentage points from the previous period.
Cost: In this period, the weekly average comprehensive profit for the chlorohydrin-based PO process was -CNY 720.33/t, up 19.90% week on week. Theoretical HPPO profit was -CNY 1,433.78/t, up 19.32% week on week.
This week, the domestic PO market once again showed a pattern of sideways consolidation followed by a rally. Around the end of last week, after breaking through the CNY 10,000 threshold, the market shifted to continued sideways trading. Over the weekend, participants jostled and prices consolidated. At the start of the week, amid a wait-and-see mood, downstream pass-through was sluggish, and producers made moderate downward adjustments; bearish sentiment dominated the market. However, crude oil fluctuated sharply again, and with the main feedstock propylene rising sharply, market sentiment quickly recovered. End-users and downstream players followed up in succession, PO turned stronger and moved higher, and coupled with the fact that the expected market supply increase had not yet materialized, the market was broadly pushed up for several consecutive days to a recent high. As of Thursday this week, Shandong PO was discussed at CNY 11,000/t cash ex-works.
During the week, PO operating rates edged up: Shida, Sanyue, and others returned to normal full-load operation; Xinyue and Ruiheng ran at slightly reduced load; Levima released a small volume. On the cost side, propylene rose strongly and liquid chlorine consolidated in a narrow range, while losses under the representative process continued. On the demand side, bearish sentiment was initially present early in the week, with most participants waiting cautiously. However, as the market rebounded strongly later, and with feedstock inventories low across the market, buyers gradually increased volumes and followed up, maintaining purchases in the short term.
Looking ahead, on the feedstock side, propylene is currently expected to fluctuate at high levels, while liquid chlorine is likely to remain stable, providing fair cost support. On the supply side, Xinyue is expected to raise its operating rate, Satellite will restart at low load, and most others are expected to remain unchanged; output is estimated to increase. Downstream demand is expected to maintain its purchasing pace for the time being, but as prices rise further, some fear-of-highs sentiment may emerge, limiting downward cost pass-through and dampening performance. Specifics should be monitored; prices are expected to retain some upside before turning sideways and weakening.
For more weekly market analysis, please refer to the Chempricehub Propylene Oxide Weekly.
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