**Cost Support vs. Supply Expansion: Propylene Glycol Market in a Stalemate, with Traders Adopting a Wait-and-See Approach**

This week, the domestic industrial-grade propylene glycol (PG) market exhibited a volatile pattern characterized by a pullback from highs and stalemate at lows.

At the beginning of the week, the market continued to operate at high levels established in the previous week. Strong cost support was maintained as raw material cost pressures were passed downstream, keeping production costs elevated for domestic PG producers. Consequently, overall market offer prices remained firm. However, under these high price conditions, actual transaction volumes lagged significantly behind, highlighting a supply-demand mismatch. Downstream end-users showed strong resistance to high prices, with purchasing enthusiasm cooling sharply. Inquiries for high-priced goods were scarce, and actual shipments remained persistently low, leading to gradually increasing pressure on sellers to move inventory. By mid-week, market offer prices declined substantially. Major producers successively lowered their ex-factory quotes, prompting spot prices across all regions nationwide to follow suit. The center of gravity for in-market transactions fell rapidly, dropping again to recent phased lows. During this continuous price decline, market sentiment weakened further. A "buy on rises, not on falls" mentality became prevalent among downstream buyers, who maintained a wait-and-see approach and were unwilling to stock up impulsively during a downtrend, resulting in a significant reduction in rigid demand purchases. Foreign trade orders also adopted a cautious stance; overseas buyers generally paused entry into the market, intending to wait for lower price levels before consolidating restocking efforts. Under the dual pressure of weak demand, overall trading atmosphere remained flat, and bearish sentiment spread continuously within the market.

Table 1: Weekly Operating Rate Comparison Across the Propylene Glycol Industry Chain

Source: Chempricehub Information

On the supply side, some units started up while others shut down during the week, offsetting each other’s impact, but overall supply increased slightly amidst stability. This incremental supply from the upstream sector also weighed on market participants' sentiment.

Regarding demand this week, most raw materials for Unsaturated Polyester Resin (UPR) continued to rise in price, but downstream follow-through remained consistently sluggish. Furthermore, diethylene glycol (DEG), a substitute product, saw its price drop rapidly below that of PG for the same period, prompting many downstream users to opt for low-price procurement, though sentiment remained neutral. On the polyether front, terminal demand showed no obvious improvement. Outdoor projects such as plastic running tracks, outdoor flooring, and track construction in the elastomer market continued to wind down or stagnate, leading to a persistent lack of rigid demand for outdoor construction and a scarcity of incremental orders. Meanwhile, mainstream downstream industries including footwear materials, rubber rollers, seals, and CPU products remained affected by the traditional off-season. Shipment rhythms for finished goods were slow, and inventory levels at manufacturing enterprises remained high, resulting in slow destocking progress. Regarding exports, foreign trade orders faced caution due to high prices, though certain rigid demand support still existed overall.

Cost-side prices remained high throughout the week, but could not counteract weak demand. With poor transactions at high price levels, suppliers continued to lower their offer prices through negotiation. Looking ahead, as the Mid-Autumn Festival and National Day holidays approach, clear wait-and-see sentiments have emerged in both domestic and international markets. Most end-use enterprises and traders have suspended routine procurement, intending to wait for lower price levels to consolidate restocking, leading to bargaining and observation within the market. It is expected that the propylene glycol market may experience a narrow downward adjustment followed by stagnant oscillation.