In August, the market for polycarboxylate superplasticizer monomer trended relatively strong, and it is expected to remain firm in September.

Overview: In August, polycarboxylate superplasticizer (PCE) monomers trended firm, underpinned by solid cost-side support and tight supply, with the price center shifting higher. However, limited demand expansion constrained the upside. Looking ahead to September, geopolitical tensions are likely to remain deadlocked, keeping cost-side support stable. Operating rates in the monomer industry are expected to stay low while demand recovers seasonally, and market prices are expected to hold firm. Close attention should still be paid to developments in the Middle East geopolitical situation and the realization of downstream peak-season demand.

Price Review: Monomer Prices Trended Firm, Price Center Shifted Higher

In August, domestic PCE monomer market prices exhibited a firm-to-strong trend at elevated levels, with the price center shifting upward. As of August 28, the mainstream EPEG monomer price in the East China market stood at 8,850 CNY/mt, up 2.91% from the beginning of the month.

In detail:

On the supply side, only a few domestic PCE monomer units experienced brief shutdowns in August. Units that had entered maintenance earlier did not resume operations, while loads at other units fluctuated within a narrow range. The industry's overall operating rate remained at a low level, with limited change in supply availability. As monomer producers shipped goods steadily, spot supply stayed tight, and most producers were delivering against order backlogs, leaving no pressure on the supply side.

On the demand side, monomer prices climbed to elevated levels after an earlier decline. Amid the prevailing bullish sentiment, downstream buyers remained cautious in their purchasing, and end users showed some resistance to high-priced cargoes. Procurement was largely limited to small-lot just-in-time needs, with bulk purchases rarely seen. In August, frequent high temperatures, typhoons, and rainfall limited incremental activity in the terminal construction sector amid the off-season atmosphere, providing only modest support to the monomer market from the demand side.

On the feedstock side, geopolitical instability pushed feedstock prices higher. Imported ethylene prices rose, while domestic ethylene rebounded after a supply-driven decline. The related product MEG, lifted by feedstock and supply factors, climbed to a yearly high, which in turn supported ethylene oxide to a certain extent. Ethylene oxide prices were raised slightly, providing bottom-line support from the cost side.

Monthly Price Comparison of PCE Monomers by Region

Cost Support: Strait Deadlock Drove MEG Prices Higher, Cost Support Persisted Through the Month

On the cost side, after the ceasefire, Iran put forward several stringent conditions—such as compensation for losses and unfreezing of assets—that were difficult for the United States to accept, leaving the reopening of the Strait of Hormuz deadlocked. The Strait remained largely closed for most of the month, constraining MEG import supply and tightening domestic availability. MEG prices hit a new yearly high, with spot prices peaking at around 6,500 CNY/mt. The strong MEG rally boosted market sentiment, prompting some co-production units to shift ethylene oxide output toward MEG. At the end of August, ethylene oxide prices were raised by 100 CNY/mt across all regions. Driven by firm feedstock costs, PCE monomer prices were also adjusted upward, further reinforcing positive cost-side support.

Supply Stays Tight: Low Industry Operating Rates, Scarce Spot Supply

During the month, some units experienced brief shutdowns, while units previously under maintenance had not yet resumed operations. A few units ran at reduced loads, and other producers made narrow load adjustments, resulting in a slight overall decline in domestic PCE monomer supply. In August, the capacity utilization rate of the domestic PCE monomer industry stood at 25.35%, down 0.1 percentage points month on month. Monthly output reached 125,200 mt, down 0.40% from the previous month.

Spot resources in the market were limited. As monomer prices were pushed up again, downstream players replenished cautiously and only for just-in-time needs amid the bullish sentiment, leaving most monomer producers with negative inventory positions. At the end of August, the sellable inventory ratio at domestic PCE monomer plants stood at -25.30%, down 0.31 percentage points month on month, while sellable inventory volume was -48,100 mt, down 600 mt month on month.

Demand Improves Slowly: Off-Season Atmosphere Lingers, Limited Volume Gains Cap Upside

Demand-side conditions for PCE monomers improved only modestly in August, offering insufficient support to the industry. Extreme weather events, including heavy rainfall and typhoons, were frequent nationwide. Widespread rain in East China—particularly in Jiangsu, Zhejiang, and Shanghai—and the Fujian area caused a sharp reduction in concrete delivery volumes. As the weather cleared, delivery volumes in various regions recovered slightly, but the overall August delivery volume contracted. The monthly average concrete operating rate came in at 5.42%, down 0.09 percentage points month on month, with total deliveries of 4,338,115 cubic meters, down 21.38% month on month. Downstream demand fundamentals remained weak, order volumes expanded only modestly, and procurement was dominated by small-lot just-in-time needs. No significant stockpiling behavior emerged, constraining the upside for prices.

Price Forecast: Cost and Supply Support to Persist; Firm Tone at High Levels as Demand Recovers

Costs: A substantive breakthrough in US–Iran negotiations is unlikely in the near term. Although a few tankers have attempted to transit the Strait, there remains a considerable gap before shipping returns to normal levels. MEG prices have retreated from their highs but are likely to remain above ethylene oxide levels in the short term. No significant increase in ethylene oxide supply is expected, and prices are expected to hold firm. Cost-side support for the PCE monomer market is unlikely to weaken markedly in September.

Supply: In September, Jiangsu Sailboat's unit previously under maintenance is expected to resume operations, while some producers have maintenance scheduled. Market supply may increase modestly, but the industry's overall operating rate is likely to remain low. Combined with persistently low inventory levels at monomer producers, sellers will have limited room for price concessions. The tight supply pattern is expected to remain unchanged in the near term, providing support for market prices.

Demand: As the hot and rainy season recedes, the downstream end-market peak season is gradually arriving. Construction activity across regions is entering the catch-up phase, with overall demand showing seasonal improvement versus August. However, downstream plants' resistance to high-priced raw materials persists, and procurement strategies will remain focused on just-in-time replenishment, with large-scale stockpiling likely to remain rare.

Overall, in September, the PCE monomer market is expected to fluctuate at high levels amid firm cost support and a somewhat tight supply picture. While demand is expected to improve seasonally, no better-than-expected volume expansion is anticipated, and procurement is expected to remain needs-based. The market is expected to sustain its overall firm-to-strong pattern in September. Close attention should be paid to developments in the Middle East geopolitical situation and the realization of downstream peak-season demand.