Supply: Zhehai Petrochemical and South China units have largely resumed normal operations, while other facilities remain stable, leading to an increase in output. Total production for the period was 137,100 tons, up by 6,500 tons from the previous period. The capacity utilization rate stood at 73.19%, a rise of 3.48 percentage points compared to the prior period.
Costs: For this period, the average weekly comprehensive profit for propylene oxide produced via the chlorohydrin process was -348 RMB/ton. The theoretical profit for the HPPO (Hydrogen Peroxide-to-Propylene Oxide) process was -1,146.9 RMB/ton.
This week, the domestic propylene oxide market experienced a phased bottoming out followed by a rebound. Prior to last week's Mid-Autumn Festival, the market remained weak with prices falling to low levels. Subsequently, downstream users began restocking, causing the market to stabilize and consolidate. Healthy shipment volumes continued during the holiday. Suppliers reduced inventory to manageable, low levels, triggering a narrow upward correction. Between the Mid-Autumn and National Day holidays, overall trading activity remained decent, though regional divergence persisted. In Northern China, baseline transaction volumes were maintained, whereas Southern China relied primarily on contract deliveries. As of today, most participants have entered holiday mode, prices have stabilized, and the price gap between North and South has narrowed due to this regional divergence.
Within this cycle, propylene oxide operating rates increased as Zhehai Petrochemical and South China units returned to normal operation, while other plants remained stable, boosting total output. On the cost side, propylene prices trended upward, while liquid chlorine prices declined; consequently, representative processes operated at slight losses. Demand showed regional divergence: normal spot trading prevailed in the North, while the South depended on contracts. Following pre-holiday stockpiling, the market consolidated before entering the holiday period.
Looking ahead, feedstock propylene is expected to trade within a range, while liquid chlorine prices are likely to remain stable or trend slightly higher, providing limited support to costs with minor fluctuations. On the supply side, most units are projected to operate stably, with output expected to rise slightly. Attention should be paid to whether inventory levels will face pressure during the holiday. Regarding downstream demand, many orders placed earlier are scheduled for delivery during the holiday. Spot trading is expected to remain concentrated in Northern China. Due to holiday effects and logistics constraints, transmission of demand to end-users may slow down, potentially leading to reduced spot purchases of propylene oxide. Without significant positive catalysts, the market is tentatively expected to follow a "down first, then up" pattern during the holiday period.
Comments
0