Supply: During the week, Binhua gradually increased its operating load, Hangjin experienced narrow fluctuations, and Qixiang maintained stable production operations. While some volumes were reduced in South China, these factors offset each other, resulting in a slight net increase in supply. Total production for this period was 130,600 tons, an increase of 4,400 tons from the previous period. The capacity utilization rate stood at 69.71%, up by 2.36 percentage points from the previous period.
Costs: The average weekly comprehensive profit for propylene oxide (PO) produced via the chlorohydrin process was -17.26 yuan/ton, a month-on-month decrease of 103.11%. The theoretical profit for PO produced via the HPPO (Hydrogen Peroxide to Propylene Oxide) process was -484.05 yuan/ton, a month-on-month decrease of 3,218.88%.
This week, the domestic propylene oxide market faced downward pressure from high levels and retreated. Last week’s sideways movement at elevated prices failed to transmit effectively, with signs of softening emerging in the latter half of the week. Combined with increased market supply and weak cost support, the market continued its weakness and trended downward toward lower levels this week. As the Mid-Autumn Festival approached, after a decline approaching 1,000 yuan/ton, market attention increased, briefly improving trading sentiment. Downstream users gradually made moderate follow-up purchases based on rigid demand, and end-users also showed some engagement; however, sustainability remained limited. Today, market sentiment is quiet, with northern markets continuing to negotiate significant price reductions. As of Thursday, spot ex-factory prices for propylene oxide in Shandong ranged from 10,470 to 10,600 yuan/ton.
Within the cycle, propylene oxide operating rates saw a slight increase: Binhua gradually ramped up loads, Hangjin fluctuated within a narrow range, Qixiang maintained stable production, and some volume reductions occurred in South China, leading to a slight net increase after offsetting effects. On the cost side, propylene prices primarily declined while liquid chlorine rebounded moderately, leaving representative production processes hovering near breakeven levels. On the demand side, moderate stockpiling occurred early in the week but subsequently slowed down again. Today, the market is observing potential phase lows. Trading activity has notably improved in the north, while East China remains dominated by contract deliveries.
Looking ahead, raw material propylene is expected to remain relatively strong with oscillating trends, while liquid chlorine may retreat, resulting in narrow fluctuations in cost support. On the supply side, most plants are expected to operate stably. Zhejiang Petrochemical is increasing its operating load, and production in South China is recovering, suggesting that output assessments will continue to rise. Inventory levels during the holiday period warrant close monitoring. Regarding downstream demand, procurement and stockpiling are occurring sequentially, primarily driven by trading activity in the north, while southern markets are focused on contract deliveries. The market expects a stabilization overall after potential high-level corrective declines in the south following the Mid-Autumn Festival. However, if crude oil and propylene prices show significant recovery, there remains a possibility for stronger performance.
For more detailed weekly market analysis, please refer to the Chempricehub Propylene Oxide Weekly Report.
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