Market momentum for polycarboxylate superplasticizer (PCE) macromers has weakened, causing high market prices to soften.

Lead-in: Since early September, the market for polycarboxylate superplasticizer (PCE) monomers has continued to rise, reaching its highest level of the year. This trend was driven by broad commodity resonance, cost-push factors, and supply-demand structural adjustments. However, downstream profit margins have been compressed, leading to weak transaction follow-through and limiting further price upside. While cost-side support remains at the bottom, a "tight near-term, loose long-term" supply pattern is gradually emerging. Meanwhile, demand during the peak season has underperformed expectations, suggesting that market prices are likely to soften from current highs.

Price Review: Weakening Bullish Factors in PCE Monomer Market Lead to Price Softening at High Levels

In the first half of September, the domestic PCE monomer market maintained a sustained upward trajectory. As of September 18, the mainstream price for EPEG (ethylene oxide polyethylene glycol ether) monomers in East China rose to 12,000 CNY/ton, an increase of 34.83% compared to the end of August, marking the year's highest point. Early in the month, escalating tensions in the Middle East and the prolonged closure of the Strait of Hormuz drove international crude oil prices higher. Consequently, ethylene prices surged, pushing ethylene glycol (EG) prices to multi-year highs. Some co-production units shifted output towards EG, tightening the supply of ethylene oxide (EO). EO prices continued to climb due to both cost push and tight supply, significantly strengthening cost support. Simultaneously, PCE monomer producers had not yet fulfilled accumulated orders from previous periods, facing raw material shortages and maintaining low operating rates, which extended the tight supply landscape. These factors collectively pushed the market price center upwards. The first half of the month was characterized by "cost and supply-driven increases." However, after prices peaked, new orders for downstream superplasticizers remained limited, severely compressing factory profits and triggering strong resistance to high-priced raw materials. Actual transactions lacked momentum, leading to a phased correction. By September 24, the mainstream EPEG price in East China fell to 11,450 CNY/ton, a decline of 5.37% from the monthly high.

PCE Monomer Price Comparison Table

Cost Aspect: Escalating Geopolitical Tensions Drive EO Prices to Highs, Strengthening Cost Support

Intensifying US-Iran conflicts continue to impact the pricing trends across the EO industry chain. Crude oil prices fluctuated upwards, with both benchmark oils breaking the $100 mark on September 11. Rising ethylene prices provided strong cost support for EO. Related product EG prices surged strongly, prompting co-production units to shift output to EG, which exacerbated the spot tightness of EO. Driven by fear of missing out on price rises and improving their own profitability, downstream users increased replenishment frequency. Products within the EO chain saw prices rise due to supply-demand dynamics and cost support. As of September 18, EO prices in East China stabilized after rising to 9,700 CNY/ton, representing a 25.97% increase from the end of August and hitting a new yearly high, providing sustained and robust cost support for PCE monomers.

Demand Aspect: Peak Season Follow-Through Falls Short of Expectations; Profit Compression Constrains Volume Growth

On the demand side, downstream demand for domestic PCE monomers in September exhibited characteristics of "marginal improvement but insufficient volume," placing some constraints on price increases. From a seasonal perspective, September marks the start of the traditional peak season for the superplasticizer industry as infrastructure and construction projects enter rush periods. Overall concrete operating loads improved compared to August. As of September 24, concrete shipment volumes rose to 1,406,310 cubic meters, a 22.36% increase from the end of August, indicating a foundation for marginal improvement in demand. Spot supply in the PCE monomer industry remained persistently tight; available inventory levels in mid-to-late September were around -65,000 tons, a 34.51% decrease from the end of August. Amidst continuous price hikes, end-users adopted cautious procurement strategies for rigid demand. However, the sustained rise in monomer prices severely squeezed downstream processing profits. Factories lacked sufficient ability to pass on costs, leading to a clear compression of production gross margins. This intensified resistance to high-priced goods among end-users, resulting in generally cautious purchasing behavior focused on small, rigid-demand orders bought on an as-needed basis. Overall, while demand is on a seasonal recovery path, it is constrained by profit compression and order shortages. The capacity to absorb high-priced raw materials is limited, failing to provide effective drive for price increases and instead acting as a suppressive factor.

Price Forecast: Game Between Cost Support and Demand Suppression May Lead to Downward Trend

Cost-side support remains, but marginal drivers are weakening. The geopolitical situation in the Middle East still contains uncertainties, and crude oil prices are expected to maintain high-level wide fluctuations. However, the marginal shock effect of geopolitical events is diminishing as the market adapts to the situation. If diplomatic mediation makes progress, there is a risk of crude oil price corrections, which would loosen cost support. Current ethylene prices are already relatively high, increasing derivative cost pressures and weakening profitability. A softening in crude oil prices would also impact the ethylene market to some extent. If geopolitical conflicts ease and imported EG supplies increase, alleviating the tight internal supply status, EG prices are expected to fall, reducing their supportive impact on the EO market.

The supply side may exhibit a "tight near-term, loose long-term" pattern. As PCE monomer producers gradually deliver accumulated orders and monomer prices begin to soften, downstream buyers influenced by the "buy on rise, not on fall" psychology may show lower enthusiasm for entering the market. The tight spot circulation situation may gradually alleviate. Holders' confidence in supporting prices due to low inventories will weaken, and willingness to sell will increase. Supply-side support for prices will diminish compared to earlier periods, potentially turning into a suppressive force in phases.

The demand side is the core constraining variable. The main contradiction in the current market lies in the divergence between high prices and weak demand. If raw material prices remain high, downstream processing profits will be difficult to restore, keeping procurement willingness persistently low and significantly discounting the realization of peak-season demand. Downstream sentiment is dominated by waiting for price drops and observing, which may slow the rate of terminal order follow-up. Bulk buying enthusiasm is unlikely to recover. Overall assistance from the demand side will likely be limited.

In summary, PCE monomer prices are highly likely to experience downward pressure around the National Day holiday period. In the short term, low inventories and cost support can keep declines manageable, but weak demand will continue to drag on the market. If crude oil prices correct or supply recovery exceeds expectations, prices are projected to soften downwards. Future developments require close monitoring of changes in the Middle East geopolitical situation, raw material price trends, and the release of downstream demand.