Price Trend Analysis: From Weakness to Stalemate

Early January: Continued Weakness
The market remained under pressure from both high supply and weak demand, consolidating weakly within the near-five-year low price range.

Mid-January: Cost-Driven, Difficult Uptrend
Driven by rising prices of the upstream raw material propylene oxide (PO), producers tentatively raised their offers. However, downstream acceptance was low, leading the market into a stalemate characterized by a "difficulty in both rising and falling." According to data from the Business Society Commodity Market Analysis System, as of January 16th, the average production price of propylene glycol (PG) in the Shandong region was 6,016 RMB/ton, unchanged from the beginning of the month.

Analysis of Core Influencing Factors
The core contradiction in the current market is the squeeze between "cost push" from above and "demand drag" from below:

• Strengthening Cost Support: The firm and rising price of the key raw material, propylene oxide (PO), continuously pushes up PG production costs. This is the core force supporting market prices and preventing further declines.
• Persistent Supply-Demand Pressure:
  • Ample Supply: There were no major plant maintenance shutdowns in the supply sector during the first half of the month, resulting in overall sufficient supply.
  • Weak Demand: Demand from major downstream sectors (such as unsaturated polyester resin and polyether industries) remained subdued. Downstream manufacturers primarily focused on destocking and purchasing based on immediate needs, showing low acceptance for high-priced raw materials.

Short-Term Market Outlook
Overall, the PG market is expected to continue in a pattern of narrow-range fluctuations in the short term.

• Upside Resistance: If downstream demand fails to improve effectively, price increases driven solely by costs will be difficult to sustain. The market will face downward pressure after any rallies.
• Downside Support: As long as propylene oxide (PO) prices remain high, the cost floor for PG will be very solid, leaving limited room for significant price declines.

In summary, during the first half of January, the PG market attempted to climb out of its trough under strong cost support, but weak demand made the upward path arduous, leading to a typical stalemate.