Prompt

1. Key Market Focus This Week

• Supply: During the week, Jinling and Wanhua plants gradually shut down for maintenance, while Sanyue reduced load for column cleaning; other facilities maintained stable operations. Total production for this period was 131,500 tons, a decrease of 100 tons from the previous period. The capacity utilization rate stood at 70.19%, down by 0.07 percentage points compared to the previous period.
• Costs: The average weekly comprehensive profit for Propylene Oxide (PO) produced via the chlorohydrin process was -1,110.91 RMB/ton, representing a month-on-month decline of 86.74%. The theoretical profit for the HPPO (Hydrogen Peroxide to Propylene Oxide) process was -1,398.06 RMB/ton, a month-on-month decrease of 27.01%.

2. Weekly Market Analysis

This week, the domestic PO market trended upward initially before pulling back into consolidation. In the latter half of last week, the market followed propylene prices higher, reaching monthly peaks. Subsequently, trading stalled as demand-side volumes decreased. Coupled with propylene’s stagnation and subsequent pullback, the market began to soften through negotiation attempts, leading to a lighter trading atmosphere and slight downward adjustments across regions. Yesterday, after propylene rebounded strongly to historical highs, market sentiment improved, showing signs of stabilization and recovery. Today, overall trading activity has warmed up, with participants closely monitoring cost support and demand performance, suggesting potential for minor price increases. As of Thursday, October 29, mainstream ex-factory cash prices in Shandong were quoted at 11,400–11,400 RMB/ton.

Within the cycle, PO operating rates slightly declined: Jinling and Wanhua units gradually halted, Sanyue reduced loads for column cleaning, while others remained stable, resulting in minimal overall change. On the cost side, propylene fell before rebounding to new highs, and liquid chlorine prices steadily rose, widening losses for representative processes. On the demand side, buyers adopted a cautious wait-and-see approach early in the week following peak prices. However, over the past two days, boosted by raw material trends, market sentiment improved, procurement volumes increased, and order follow-through strengthened.

3. Outlook and Analysis for Propylene Oxide

Looking ahead, propylene is expected to fluctuate at high levels, while liquid chlorine prices are projected to dip before rising, maintaining strong cost support. Regarding supply, Jinling is expected to restart in the second half of the week, Wanhua Phase III will remain offline, and Sanyue continues to operate at reduced loads during column cleaning; other facilities will stay stable, leading to a narrow contraction in supply. Downstream demand is expected to see limited release around the month-end/month-start transition before stabilizing. Overall, cost and supply-side support are anticipated to moderately strengthen. Consequently, PO prices are expected to primarily track propylene’s gains, rising before entering consolidation. The sustainability of demand will determine the extent of further upside, with the market likely to surge and then consolidate.