Demand momentum for polycarboxylate superplasticizer (PCE) macromers remains weak, costs stay elevated, and prices continue to trend downward.

Introduction: Entering October, the polycarboxylate superplasticizer (PC) monomer market has entered a downward trend. Downstream buyers are largely adopting a wait-and-see approach, leading to sluggish new order transactions. While raw material ethylene oxide (EO) prices remain firm at high levels, increasing cost pressures, weak order support means bearish factors for the PC monomer market are expected to increase, suggesting that prices may continue to trade weakly.

Cost and Demand Dynamics: Monomer Prices Decline from High Levels

As October begins, negotiations between the US and Iran are ongoing. Crude oil prices remain at high levels but have had limited impact on boosting the polycarboxylate superplasticizer monomer supply chain. Ethylene prices have softened, and ethylene glycol (EG) prices fell after an initial rise. Although ethylene oxide prices remain firm at high levels, providing cost support for PC monomers, downstream caution and resistance have intensified as previous price hikes pushed monomer costs to elevated levels. Buyers show low willingness to purchase at these highs, preferring to consume existing inventory and fulfill prior orders, with only small-scale replenishment driven by rigid demand when prices dip slightly. Consequently, new order transactions have remained flat, and demand-side support for the market has weakened significantly. Additionally, while crude oil prices remain high due to ongoing US-Iran talks, market concerns over geopolitical conflicts in the Middle East have eased. EG prices have dropped below 6,000 CNY/ton, further strengthening bearish sentiment among downstream and end-users and suppressing demand release. Coupled with increased spot supply in the PC monomer market, prices have begun their downward trajectory.

As of October 10, the reference price for EPEG in the East China market was 10,100–10,600 CNY/ton, a decrease of 550 CNY/ton compared to the end of September. HPEG prices were referenced at 10,400–10,800 CNY/ton, down 400 CNY/ton from the end of September. TPEG prices were also at 10,400–10,800 CNY/ton, representing a 400 CNY/ton drop from late September.

Limited Demand Continuation in "Silver October"; Cost Side Provides Support

Overall demand performance in the PC monomer market during "Silver October" has been lackluster. Following the Mid-Autumn Festival, as monomer prices declined, downstream buyers tightened procurement pace and volumes to mitigate the risk of further price drops. Currently, manufacturers are gradually delivering accumulated backlog orders, with new orders being released sporadically. The demand side's "continuation" has fallen short of expectations, weakening its support for the monomer market. Some PC monomer producers have started offering discounts to secure orders, but downstream sentiment remains cautious, resulting in limited transaction volume.

On the cost side, units shut down for maintenance have not yet restarted. Production lines at Sanjiang, along with Taixing Jinyan, Yangzi Petrochemical, and Hainan Refining & Chemical facilities, remain under maintenance. Two temporarily stopped units at Sanjiang and Fude Energy’s unit have also not resumed operations. However, with EG prices falling, EO profit margins have improved, prompting some co-production facilities to shift capacity toward EO production. This has slightly increased spot circulation volumes in the EO market. Despite this, overall supply pressure remains manageable, and steady consumption on the demand side keeps EO prices firm. As of October 10, the EO price in East China held at 9,700 CNY/ton, an increase of 1,100 CNY/ton compared to the same period in September.

In comparison, PC monomer prices declined in October due to weak demand. From a profitability perspective, high costs continue to exert pressure. As of October 10, the weekly average profit margin for HPEG in East China stood at -162.33 CNY/ton, a drop of 450 CNY/ton from pre-National Day levels, shifting from profit to loss. This indicates significant cost-side pressure on the monomer market. With demand failing to sustainably follow through, support for the PC monomer market is insufficient. Amidst the tug-of-war between costs and demand, PC monomer prices have retreated.

Market Outlook: PC Monomer Market Likely to Trade Weakly in October

Geopolitical tensions are expected to ease in October, potentially leading to lower crude oil prices. EG market supply is set to increase, with prices likely to weaken. There are no immediate plans for restarting previously maintained EO units, and maintenance activities remain relatively concentrated. Supply-side support for EO prices persists, suggesting EO prices will likely remain stable or be watched closely, providing bottom-line support for PC monomers.

Regarding supply and demand, some facilities are ramping up loads, while others anticipate maintenance, with remaining units seeing narrow fluctuations in operating rates. Overall utilization rates may see a slight increase. As monomer enterprises complete the delivery of earlier backlog orders, the market spot supply situation will evolve accordingly.