Introduction: In April, the domestic propylene oxide (PO) market showed an initial rise followed by a decline. At the beginning of the month, costs continued to drive prices upward, but the market then returned to supply-demand logic. However, in the middle and late months, scheduled maintenance was limited, some units restarted, and downstream demand transmission was hindered. Prices fluctuated and fell from high levels. By the end of the month, the market remained weak and volatile, with limited room for further declines before the holiday, gradually stabilizing. After the holiday, some support may come from output reductions.
1. Market Review
Table 1 Domestic Propylene Oxide and Related Product Price Table
| Item | 2026/4/23 | 2026/4/29 | Change | Change% | Unit |
|---|---|---|---|---|---|
| Key Regions | |||||
| Shandong | 10685 | 10200 | -485 | -4.54% | yuan/ton |
| East China | 11050 | 10400 | -650 | -5.88% | yuan/ton |
| Key Downstream | |||||
| Polyether (Flexible Foam) | 11250 | 10700 | -550 | -4.89% | yuan/ton |
| Propylene Glycol | 10150 | 10100 | -50 | -0.49% | yuan/ton |
| Key Related | |||||
| Propylene | 9305 | 9375 | 70 | 0.75% | yuan/ton |
| Liquid Chlorine | 350 | 600 | 250 | 71.43% | yuan/ton |
Source: chempricehub
During this period, the domestic PO market moved downward with fluctuations. There was a brief rebound attempt at the end of last week, which reduced inventory to a medium-low level, but downstream sustainability was limited. By Sunday, the market weakened again. Producers, in anticipation of the May Day holiday, adjusted prices downward again to ensure low inventory before the holiday. As of April 29, the mainstream transaction price in the Shandong market reached 10,200 yuan/ton ex-works (cash), down 485 yuan/ton from April 23, a decrease of 4.54%. In East China, where prices had been relatively firm earlier, the decline was 5.88%, slightly larger than in Shandong, narrowing the north-south price spread.
Among related products, the key downstream polyether and propylene glycol prices followed PO downward. The difficulty in transmitting demand downstream was the main contradiction in the recent decline. On the demand side, previous concerns over the international situation led to some anxiety, with downstream buyers accumulating inventory to medium-high levels. Current destocking is slow, and new orders are insufficient. Some downstream plants reported that while raw material prices were high, product prices were difficult to raise, hindering cost pass-through. Additionally, watching PO prices fall from 13,300 yuan/ton in early April to the current 10,200 yuan/ton (a cumulative decline of 3,100 yuan/ton), downstream buyers became more cautious.
On the cost side, prices of key raw materials propylene and liquid chlorine both rose during this period. However, due to weak supply-demand fundamentals, the market downtrend remained unchanged. By recently, losses have widened, with the PO-propylene price spread only 825 yuan/ton. Some suppliers have signaled possible production cuts. Cost support has strengthened compared to earlier.
2. Data Analysis
Table 2 Domestic Propylene Oxide and Related Product Data Table
| Item | 2026/4/23 | 2026/4/29 | Change | Change% | Unit | |
|---|---|---|---|---|---|---|
| Propylene Oxide | ||||||
| Theoretical Margin (Chlorohydrin) | -401.15 | -1174.25 | -773.1 | 192.72% | yuan/ton | |
| Theoretical Margin (HPPO) | -825.9 | -1350.5 | -524.6 | 63.52% | yuan/ton | |
| Daily Output | 1.83 | 1.78 | -0.05 | -2.73% | 10,000 tons | |
| Capacity Utilization | 68.83% | 66.87% | -1.96% | / | % | |
| Key Downstream | ||||||
| Polyether Capacity Utilization | 57.4% | 56.5% | -0.9% | / | % | |
| Propylene Glycol Capacity Utilization | 69.05% | 69.05% | 0.00% | / | % |
Source: chempricehub
Looking at key PO-related data, compared with April 23, the theoretical margins for representative processes have all shrunk significantly. PO prices fell while feedstock prices rose, especially for the chlorohydrin process where strong liquid chlorine prices further squeezed profitability. Cost support has strengthened.
On the supply side, domestic PO daily output decreased by 0.05 million tons from April 23, with capacity utilization down 1.96 percentage points. Jincheng formally started external sales, Ruiheng shut down, Jinling Huntsman slightly reduced load, and there were individual adjustments in chlorohydrin units. After offsetting increases and decreases, supply narrowed slightly.
On the downstream side, capacity utilization declined steadily. Polyether operating rates were down 0.9 percentage points from April 23, mainly because some plants had high inventory pressure and limited orders, leading to some production cuts, slowing consumption of PO.
3. Post-Holiday Forecast
Table 3 Domestic Propylene Oxide Data Forecast Table
| Item | 2026/4/29 | 2026/5/6E | Change | Change% | Unit |
|---|---|---|---|---|---|
| Raw Material Propylene Price | 9375 | 9100 | -275 | -2.93% | yuan/ton |
| PO Shandong Price | 10200 | 10300 | 100 | 0.98% | yuan/ton |
| Capacity Utilization | 66.87% | 67.12% | 0.25% | % | |
| Key Downstream Polyether Capacity Utilization | 56.5% | 57.8% | 1.30% | % | |
| Key Downstream Propylene Glycol Capacity Utilization | 69.05% | 69.05% | 0.00% | % |
Source: chempricehub
Looking ahead after the May Day holiday, the propylene price is expected to moderate, declining by 2.93%, leading to a slight decrease in cost.
On the PO supply side, Zhejiang Petrochemical and Tianjin Petrochemical are expected to restart. Some plants such as Hangjin, Shenghong, and Satellite have indicated possible load reductions due to cost pressure. Capacity utilization is expected to increase slightly, but since Zhejiang Petrochemical's output is fully self-used and Tianjin Petrochemical's volume is limited, the output reduction from plants that do external sales may provide some support. On the downstream polyether side, capacity utilization is expected to increase slightly after the holiday as some plants resume operations after short shutdowns. Propylene glycol is expected to operate stably.
Based on market sentiment surveys, the proportions of bullish, bearish, and neutral views after the holiday are not significantly different. Market information is mixed, and the overall outlook remains unclear given conflicting factors. Considering a possible reduction in commodity supply and an expected increase in polyether operating rates, the post-holiday PO market may see a narrow upward move. The mainstream ex-works (cash) price in Shandong is estimated to reach 10,300 yuan/ton.
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