Cost Support Drives Prices to a Sharp Surge; Rapid Decline Follows Resistance to High Levels (Oct 23–29, 2026)

1. Key Market Focus for the Week

   1. Production: Shandong Deppu’s Phase I unit maintained stable operation after its restart during the week, while other operating units continued running at previously extended load levels.

   2. Demand: The UPR (unsaturated polyester resin) plant utilization rate stood at 35%, with overall capacity utilization rising slightly on a week-on-week basis. Most unsaturated resin plants maintained stable operations; restarted units led to a modest increase in utilization and output compared to the previous week.

   3. Cost: During this period, the comprehensive gross profit margin for domestic propylene glycol and dimethyl carbonate produced via PO transesterification was +91.05 CNY/ton, down 49.21% week-on-week. Profitability continued to decline from the previous week.

2. Weekly Market Analysis

Table 1: Weekly Price Changes of Domestic Propylene Glycol (Unit: CNY/ton)

Data Source: Chempricehub Information

This week, the propylene glycol market saw prices rise first and then fall. In the latter part of last week, significant trading volumes occurred at low price points, supported by rising propylene oxide (PO) prices, which encouraged propylene glycol producers to actively raise prices in line with PO. However, this week, following a high-priced opening, sales encountered resistance. As some producers accumulated inventory, they decisively lowered ex-factory prices. Subsequently, cost support mid-week led to an increase in transaction volume.

3. Analysis of Market Influencing Factors

   1. As of the close on October 29, the weekly average comprehensive gross profit margin for domestic propylene glycol and dimethyl carbonate produced via PO transesterification was +91.05 CNY/ton, down 49.21% week-on-week.

   2. Last Thursday, as the key raw material propylene oxide (PO) stabilized after hitting a bottom, and propylene glycol prices remained relatively low, foreign trade customers purchased aggressively at low prices, leading to high transaction volumes at these levels. Producers subsequently withheld quotes. Last Friday, PO prices began their rebound, increasing production costs for new batches of propylene glycol. With no pressure on shipment schedules, producers actively raised prices in tandem with PO. Over the weekend, propylene glycol prices continued to track PO increases, but new orders declined noticeably, cooling market sentiment. This week, propylene glycol opened at high prices, but customer acceptance was insufficient, leading to widespread inventory drawdown expectations and sales resistance for producers. They quickly lowered ex-factory prices. Once some Shandong prices dropped to 8,600 CNY/ton (TT payment), and as propylene resumed its upward trend, market trading sentiment improved, supporting a stabilization in propylene glycol prices.

4. Next Week Market Forecast

Looking ahead, later this week propylene glycol prices primarily tracked the rise in raw material PO. However, high-level transactions faced resistance, prompting producers to focus on shipments and lower propylene glycol prices again.

Regarding the propylene oxide (PO) market, looking forward, the raw material side sees propylene oscillating at high levels, while liquid chlorine prices are expected to dip before rising, maintaining cost support. On the supply side, Jinling is expected to restart its unit in the second half of the week, Wanhua Phase III will remain shut down, Sanyue is reducing loads during tower cleaning, and others will maintain stability, resulting in a slight reduction in supply. Downstream demand will see minor release at the month-end/month-beginning transition before slowing down. Overall, cost and supply-side support are moderately strengthened. PO prices are expected to follow propylene gains, rising before consolidating. The sustainability of downstream demand will determine the extent of upside potential, with the market likely to surge and then consolidate.

On the demand side, domestic unsaturated resin prices are expected to consolidate within a narrow range next week, with a downward bias. Currently, cost support is weakening, leaving room for spot resin prices to retreat slightly. Acceptance of high-priced goods remains low, with clear resistance from downstream sectors. Specific analysis follows:

1. Supply Side: The overall operating load of unsaturated resin enterprises is expected to decline steadily.
2. Demand Side: Resin prices remain relatively high, dampening downstream willingness to chase further increases. Maintenance and shutdown scopes among downstream and end-use industries are expanding, leading to continuous order shrinkage. High resin prices further squeeze downstream production costs and profits, pushing some enterprises into losses. Against the backdrop of persistently weak end-user demand, downstream orders continue to contract, making it difficult to drive substantial rigid demand or boost procurement pace for unsaturated resins.
3. Cost Side: Styrene markets may oscillate weakly, thereby weakening cost support for unsaturated resins.