In May, the domestic industrial-grade propylene glycol market experienced a reversal. From early to mid-month, the market continued the weak trend seen since late April, with prices accelerating their decline and hitting a cyclical low under the dual pressures of collapsing cost support and persistently weak downstream demand. However, entering the latter part of the month, temporary fluctuations at major operating units, combined with planned maintenance shutdowns at several plants in East China, tightened spot supply. Market sentiment shifted from bearish to bullish, with other operating plants adopting a hold-for-higher-price stance, causing prices to rebound rapidly.

This week, feedstock propylene oxide prices have been stable with a slight downward trend. The atmosphere in the main propylene glycol market has softened somewhat, with prices in East and South China inverted against the Shandong market. Occasional low-priced transactions have occurred, with deals concluded on a negotiated basis.

From a cost perspective, the propylene oxide market in May showed an overall trend of fluctuating downward before stabilizing. The main driver was persistently weak supply and demand fundamentals. Although the cost of feedstock propylene remained supported at high levels, it was insufficient to reverse the downturn. Market sentiment and plant fluctuations periodically influenced the rhythm. This week, the domestic propylene oxide market rose initially and then fell. Earlier, widespread production rate cuts and the release of maintenance shutdown news provided support for propylene oxide prices to rise. However, downstream feedback was poor, with buyers reporting a decline in new orders and reduced tolerance for high prices, leading to consecutive reductions in purchasing volumes. At the same time, some units that had cut rates moderately resumed operations. Over the past two days, poor offtake prompted offers on a negotiated basis, while in the south, transactions were mainly based on month-end contracts, with actual trading sparse. The market remained stable with a downward bias.

In the downstream unsaturated polyester resin sector, prices oscillated and fell. Weakened cost support, due to a broad decline in upstream raw material prices, led resin producers to offer prices on a stable-to-weak trend. In terms of market performance, sellers showed a strong willingness to sell, with increased instances of voluntary price concessions, resulting in frequent low-priced supply. Driven by expectations of falling raw material prices, downstream buyers maintained just-in-time procurement, exhibiting a clear tendency to push prices down. Factory-gate prices of resin companies were generally lowered by 100-200 CNY/ton, but spot transactions remained subdued. Insufficient new orders from end-use sectors further dampened market activity. Currently, there is a significant price divergence between buyers and sellers, with some transactions requiring substantial concessions to be concluded, reflecting prominent supply-demand contradictions and a generally weak atmosphere. In the polyether sector, downstream inquiries were lackluster, leading to weak new order settlements for polyether. The export boost from earlier tax rebate policy adjustments gradually faded, reducing polyether producers' production enthusiasm and their consumption of feedstock propylene glycol.

On the export side, China's propylene glycol imports in April 2026 totaled 4,516.67 tons, with Thailand being the largest source at 2,486.63 tons. Cumulative imports from January to April 2026 reached 22,186.93 tons, down 0.32% year-on-year. China's propylene glycol exports in April stood at 42,957 tons, with the United States as the top destination at 4,271.61 tons. Cumulative exports from January to April 2026 amounted to 137,872 tons, up 34.41% year-on-year.

It is expected that propylene glycol exports in May will still have some positive support, but domestic downstream demand based on actual needs remains weak, with limited enthusiasm for chasing higher prices. Looking ahead, the propylene glycol market price may remain stuck in a range-bound oscillation. If previously idled units restart and new capacity comes on stream, the market may weaken and decline.