In the first half of January, the domestic propylene oxide (PO) market continued its strong momentum, with prices rising significantly. According to the monitoring system of 100ppi.com, as of January 13, the benchmark price of propylene oxide was 8,333.33 yuan per ton, representing a 7.76% increase compared to January 1. This price surge resulted from the convergence of multiple favorable factors, and the market is expected to maintain a relatively strong performance in the short term. **Supply Side:** An unexpected tightening in market supply served as the foundation for this price increase. Firstly, several major production facilities across multiple regions experienced reduced operating rates or shutdowns. In Shandong, the main production area, multiple units operated at lower capacities, while key facilities in East China, such as Zhenhai Phase II and Sinochem Quanzhou, were under maintenance shutdowns. This led to a relatively low national capacity utilization rate of 73.47%. Secondly, industry inventories have fallen below the "safety cushion." As of January 9, the overall industry inventory stood at approximately 40,000 tons, well below the safety warning line. Factory inventories are generally low, and spot supply remains tight. The sudden tightening of the supply-demand balance has directly strengthened producers' resolve to maintain high prices. **Demand Side:** Strong demand has been the core driver of the price increase. On one hand, downstream polyether production capacity has expanded. For instance, new facilities such as Shandong Longhua and Guangxi Tongkun have commenced operations, directly increasing the rigid consumption of propylene oxide. On the other hand, the "last-minute rush" effect of a key policy has become prominent. According to a Ministry of Finance announcement, the export tax rebate policy for primary polyether will be abolished starting April 1, 2026. To secure orders before the policy window closes, downstream export demand has surged ahead of schedule, with a large number of export orders being front-loaded into the first quarter for concentrated production. Simultaneously, domestic customers have proactively replenished their inventories due to concerns about potential future raw material price increases. The combined effect of domestic and international demand has created an active market atmosphere, effectively absorbing high-priced supplies. **Raw Material Side:** Rising prices of raw material propylene have also contributed to the upward trend, providing solid cost support. According to 100ppi.com’s monitoring system, as of January 13, the benchmark price of propylene was 5,921.00 yuan per ton, representing a 3.56% increase compared to the beginning of the month (5,717.67 yuan per ton). **Outlook:** Analysts from 100ppi.com believe that, under the clear expectation of a "tight supply-demand balance," market sentiment has quickly turned bullish. Downstream enterprises have shifted from a wait-and-see approach to actively replenishing inventories to prepare for potential future price increases and supply shortages. Meanwhile, the price of the main upstream raw material, propylene, has shown a steady to slightly upward trend in mid-January, providing relatively solid cost support for propylene oxide. Overall, driven by multiple factors such as low inventories, front-loaded demand, and supply constraints, the price of propylene oxide is expected to further rise in the short term. Future market trends will require close attention to the restart progress of large-scale facilities such as Sinochem Quanzhou and the actual sustainability of the polyether export "rush."