Cost Stalemate Combined with Supply Shocks Leads to Market Pullback from Highs (October 9–15, 2026)

1. Key Market Focus This Week

1. Production: During the week, Deppu’s Phase III unit was shut down, while its Phase II unit restarted and is operating normally. Shaanxi Baijiarui’s unit has restarted operations. Hunan Zhongchuang’s units have gradually been shut down, while other facilities maintained their previous operational status.

2. Demand:

   • Unsaturated Polyester Resin (UPR): The weekly operating rate stood at 35%, with overall capacity utilization rising significantly compared to the previous week. Following the holiday, UPR plants resumed operations after shutdowns, leading to a gradual increase in operating loads and a notable rise in output.
   • Polyether: Spot market offers fluctuated downward, and trading sentiment remained weak. Holders actively offered discounts to stimulate sales, while downstream buyers entered the market on an as-needed basis, maintaining a rhythm of essential demand procurement. Actual transactions were limited. Key focus remains on downstream market sentiment and raw material news.

2. Weekly Market Analysis

Table 1: Weekly Price Changes for Domestic Propylene Glycol (Unit: RMB/ton)

Data Source: Chempricehub Information

This week, the propylene glycol market generally exhibited a trend of pulling back from high levels. Prices gradually declined due to ample supply and a lackluster atmosphere in key markets. Although foreign trade orders provided some support, the interplay of multiple factors affecting supply and demand exerted pressure, resulting in weak market performance.

3. Analysis of Market Influencing Factors

1. As of the close on October 15, the average weekly comprehensive gross profit for domestic PO transesterification-based propylene glycol and dimethyl carbonate was +302.83 RMB/ton, representing a month-over-month decrease of 45.58%.

2. Early in the week, suppliers maintained high offer prices, and the market continued to see relatively firm quotations. Although elevated costs provided some support for propylene glycol prices, end-users and holders generally resisted high-priced goods, making it difficult to achieve significant transaction volumes. Consequently, the market displayed characteristics of "high prices but low activity." Subsequently, as news regarding the restart of Northwest units gained traction, expectations of tightening supply fell through, significantly impacting market sentiment. Bearish sentiments intensified among holders and downstream buyers. While export demand still provided some essential support, domestic transactions were primarily driven by scattered spot needs. Suppliers actively sought orders and shipped out inventory, causing offer prices to gradually retreat to phase-wise lows. The center of gravity for transactions continued to shift downward, with persistent wait-and-see attitudes and stalemate conditions between buyers and sellers.

4. Next Week Market Forecast

Looking ahead, the propylene glycol market is expected to experience narrow-range fluctuations. Continuous attention should be paid to changes in plant operations within the market and guidance from raw material prices.

Raw Material Side: The domestic propylene oxide (PO) market is undergoing consolidation and bargaining following recent gains. Last week, coinciding with post-holiday resumption of work, cost support combined with relaxed supplier pressure and essential downstream procurement drove a strong upward trend. By the weekend, prices reached higher levels before temporarily slowing down for digestion. This week, although some plants conducted short-term maintenance reducing supply, the shipping atmosphere cooled noticeably. After initial essential purchases, transmission of new orders was poor, with downstream buyers reducing procurement volumes. The primary feedstock, propylene, also stalled in narrow-range consolidation. With bull and bear factors intertwining, the market is currently in a stalemate and consolidating. While there may be room for negotiation, actual transactions are sparse, and mainstream prices remain stable. In the subsequent market outlook, narrow-range fluctuations are expected, likely following a pattern of declining first then rising. Upside and downside potential are limited by competing factors, and crude oil volatility should also be monitored.

Demand Side: Next week, domestic unsaturated polyester resin prices are expected to mainly consolidate, with limited price fluctuations. Cost support remains decent, and spot prices may see slight upward oscillations; however, high-priced goods require time for downstream acceptance and digestion. In the short term, the market is likely to maintain high-level consolidation with a steady or slightly rising price center. Specifically:

1. Supply Side: Overall operating loads at UPR plants are expected to continue increasing, with expectations for new unit startups.
2. Demand Side: Resin prices remain high, weakening downstream chase-up sentiment. Spot transactions are dominated by small-volume essential demand, with a slow trading pace. With October half over, traditional "Silver October" peak season demand has fallen short of expectations. High resin quotes significantly increase cost pressures for downstream users. Against the backdrop of persistently weak terminal consumption, downstream orders are unlikely to see significant growth, failing to effectively drive the volume and pace of essential demand for UPR.
3. Cost Side: Markets for major raw materials such as styrene and maleic anhydride are expected to fluctuate, providing certain cost support for unsaturated polyester resin.