Price Decline Following Prolonged High-Level Stalemate: Costs, Co-Product Economics, and Exports Jointly Drive Market Trends (September 18–24, 2026)

1. Key Market Focus This Week

1. Production: The new unit at Deppu operated normally, while the old unit remained shut down. Other units maintained their previous operational status.

2. Demand:

• UPR (Unsaturated Polyester Resin): Weekly operating rate was 32%, with overall capacity utilization slightly lower than the previous week. Production fluctuations among unsaturated resin plants were minimal. This week, a plant in Shandong reduced load, and a plant in Guangdong shut down, leading to a slight decrease in output compared to last week.
• Polyether: Spot market offers dropped significantly. Propylene oxide (PO) prices fell sharply during trading hours, resulting in a sluggish trading atmosphere. Holders lowered their offers in line with the market decline. Before the holiday, downstream buyers primarily maintained essential demand inquiries and transactions, with small-volume deals closing. Bearish sentiment persists for the future outlook, with limited actual trades. Key focus remains on downstream entry psychology and raw material news.

2. Weekly Market Analysis

Table 1: Weekly Price Change Table for Domestic Propylene Glycol Market (Unit: RMB/ton)

Data Source: Chempricehub

This week, high prices initially suppressed transactions in the propylene glycol (PG) market, while low prices triggered concentrated stockpiling. Essential export demand continued to support the market. Meanwhile, the price of dimethyl carbonate (DMC), a co-product from the PO transesterification process, continued to decline, squeezing profit margins for integrated units. This became the core linked factor influencing the PG market this week, resulting in significant volatile trends.

3. Analysis of Market Influencing Factors

1. As of the close on September 24, the weekly average comprehensive gross margin for domestic PG and DMC produced via the PO transesterification method was +285.51 RMB/ton, a quarter-on-quarter decrease of 78.27%.

2. At the end of last week, raw material propylene oxide (PO) prices remained firm at high levels. Early in this week, PG market quotes maintained previous highs, but terminal markets strongly resisted these high prices, causing transaction difficulties. Domestic factory inventories slowly accumulated, suppliers' resolve to hold prices weakened, and the market entered a stalemate characterized by "prices without volume," with actual transactions relying heavily on negotiation. Mid-week, PG market prices plummeted rapidly as raw material prices dropped significantly. Following this sharp decline, trading psychology shifted noticeably; domestic downstream buyers entered the market at low prices, and essential foreign trade orders were concentrated, improving shipment conditions. Some sellers began hoarding inventory and suspending offers. Recently, PG prices have hit bottom and stabilized. Furthermore, the rapid drop in co-product DMC prices has led most domestic transesterification units to rely on PG orders as their core support, maintaining normal production to offset losses from DMC. Producers adjusted PG quotes within narrow ranges based on real-time profit structures of co-products. Supported by PG export orders, which hedged against the negative impact of DMC prices, the PG market did not continue to fall alongside its co-product. Instead, it stabilized at low levels and showed signs of recovery with a slight upward trend.

4. Next Week Market Forecast

Looking ahead, wait-and-see attitudes persist within the market. The PG market is expected to fluctuate at low levels.

Raw Material Side: The domestic PO market faced pressure from high levels and declined. Last week's sideways movement at highs failed to transmit downward effectively, showing signs of loosening in the second half of the week. Combined with increased supply and weak cost-side support, the market remained weak this week, continuing to test lower levels. Approaching the Mid-Autumn Festival, after drops approaching 1,000 RMB, market attention increased, briefly improving trading sentiment. Downstream buyers followed up moderately with some essential demand, and terminal customers also made some purchases, though sustainability was limited. Today, the market atmosphere remains quiet, with northern markets continuing to negotiate significant price reductions. For the subsequent market, following potential catch-up declines in southern high-price areas after the Mid-Autumn holiday, stability is expected to prevail. However, if crude oil and propylene prices rebound significantly, there may be room for stronger performance.

Demand Side: The domestic UPR market price is expected to maintain a firm trend next week. Cost-side support is relatively stable, with spot prices potentially rising slightly amid minor fluctuations. However, high-priced goods still require gradual acceptance and digestion by downstream buyers. In the short term, the market is likely to maintain consolidation at high levels with a steady-to-rising center of gravity. Specifically:

1. Supply Side: Overall operating loads at UPR plants are expected to continue declining. With the National Day holiday approaching, many plants plan to shut down or reduce loads.
2. Demand Side: Resin prices remain high, limiting downstream willingness to chase rallies. Spot transactions are dominated by small orders based on essential demand, with a slow trading pace. Entering October, demand during the traditional "Silver October" peak season remains to be verified. High resin prices have significantly increased cost pressures for downstream buyers. Against the backdrop of sustained weak terminal consumption, downstream order volumes are unlikely to grow significantly, thus failing to provide effective stimulus for rigid demand and procurement pace for UPR.
3. Cost Side: Major raw materials such as styrene and maleic anhydride are oscillating within high ranges, providing certain cost support for UPR.