1. Key Market Focus This Week

1) Supply:
Shaanxi Baijiarui’s unit operated stably throughout the week, while Hunan Zhongchuang halted production and sold off existing inventory. Most other operating units maintained stable load levels, resulting in ample supply.

2) Demand:

• Unsaturated Polyester Resin (UPR): The weekly operating rate was 34.5%. Overall capacity utilization declined slightly on a week-on-week basis. The shutdown of one unit in Hebei for maintenance reduced industry operating loads, leading to a corresponding decrease in output compared to last week.
• Polyether: The spot market continued its weak trend. Raw material prices rose then fell, causing elastomer polyether offers to follow suit downward. Facing end-of-month sales targets, manufacturers offered discounts to stimulate transactions.

2. Weekly Market Analysis

Table 1: Weekly Change in Domestic Propylene Glycol Market Prices (Unit: CNY/ton)

Data Source: Chempricehub Information

The propylene glycol (PG) market prices rose initially before declining this week. At the beginning of the week, prices followed the increase in propylene oxide (PO), with customers purchasing moderate amounts based on rigid demand. Subsequently, new order demand softened. However, since most manufacturers were primarily shipping against existing orders, pressure remained limited, resulting in a gradual downward price trend.

3. Analysis of Market Influencing Factors

1. As of the close on October 22, the weekly average comprehensive gross profit for domestic PG & Dimethyl Carbonate (DMC) via PO transesterification was +179.25 CNY/ton, a decrease of 40.81% week-on-week.

2. Early in the week, the key raw material propylene oxide (PO) surged by 300 CNY/ton, strengthening PG production costs. Suppliers raised offer prices slightly, and customers made moderate purchases based on rigid demand, while foreign trade orders performed reasonably well. Later, new order demand faded, but many manufacturers were temporarily occupied with shipping existing orders, keeping inventory and shipment pressures relatively low. Additionally, although PO prices pulled back, the decline was slow. Consequently, in the mid-to-late part of the week, domestic PG market prices showed a stable yet gradually declining trend, with the rate of decline remaining relatively slow.

4. Next Week's Market Forecast

Looking ahead, PG market prices are expected to rise first and then fall, with limited fluctuation range as the market awaits volatility in influencing factors.

• Propylene Oxide (PO) Market: On the raw material side, propylene is expected to rebound moderately, while liquid chlorine remains weak; cost-side support may improve. On the supply side, units at Jinling and Wanhua Phase III are expected to shut down for maintenance successively, while others remain stable, reducing supply volume. On the downstream demand side, some rigid demand exists towards the end of the month, with pent-up demand expected to be released appropriately at certain nodes. Currently, cost and supply-side support are strengthening, which may stabilize the market. If propylene surges strongly, it could drive PO higher, but the sustainability of demand will determine the upside potential. The market is likely to experience narrow-range oscillations due to conflicting forces.

• Demand Side (Unsaturated Polyester Resin): Domestic UPR market prices are expected to rise slightly within a narrow range next week, with limited upside space. Current cost support is strong, suggesting potential minor increases in resin spot prices. However, high-priced goods require time for downstream acceptance and digestion, constraining further price rises. Specifically:

  1. Supply: Overall operating rates at UPR plants are expected to continue rising, with expectations for new units coming online.
  2. Demand: With resin prices at relative highs, downstream willingness to chase price increases is insufficient. Spot trading continues to reflect small-volume rigid demand patterns, with sluggish transaction pace. More than halfway through October, demand has underperformed expectations, and high resin quotes have further exacerbated downstream cost pressures. In an environment of persistently weak terminal consumption, downstream orders are unlikely to see significant growth, failing to effectively drive UPR rigid demand scale or procurement pace.
  3. Cost: Core raw materials such as styrene and maleic anhydride are expected to maintain volatile trends, providing certain cost support for unsaturated polyester resin.