Range-Bound Consolidation Followed by a Bullish Trend: Raw Material Costs Impact Market Sentiment (Oct 1–10, 2026)

1. Key Market Focus This Week

   1. Production: The Weiers plant was shut down during the National Day holiday but has been restarted and is currently operating normally post-holiday. Deppu’s Phase III PG (Propylene Glycol) unit with a capacity of 170,000 tons/year is offline, while its Phase II PG unit (80,000 tons/year) is undergoing restart adjustments. Other units have maintained their previous operational status.

   2. Demand: The weekly operating rate for Unsaturated Polyester Resin (UPR) stood at 15%.

   Polyether spot market offers continued to rise and consolidate. Trading remained driven by rigid demand, with holders negotiating prices upward in line with rising costs. Market sentiment was relatively muted, with few actual transactions. Attention remains focused on downstream buyers’ sentiment and raw material news.

2. Weekly Market Analysis

This week, the domestic industrial-grade propylene glycol (PG) market exhibited a pattern of fluctuating consolidation. Supply-side disruptions during the holiday were limited, with cost-side fluctuations dominating market trends. There was a clear divergence between domestic and overseas demand, leading to ongoing negotiation dynamics within the market.

3. Analysis of Market Influencing Factors

Supply Side: During the National Day holiday, some production units in Shandong experienced short-term operational fluctuations, causing minor supply disturbances. However, as operations resumed after the holiday, overall utilization rates stabilized, limiting the supply side’s impact on market momentum.

Cost Side: The raw material propylene oxide (PO) market fluctuated this period. PO prices initially fell during the holiday, prompting domestic PG producers to lower their offers to low levels. As PO prices rebounded from the bottom post-holiday, cost support gradually recovered, leading PG producers to raise their quotes accordingly, resulting in a slight upward shift in the market center. Nevertheless, the rebound intensity of raw materials was limited, providing only temporary cost support rather than driving sustained significant price increases in PG. Consequently, PG price adjustments remained restrained.

Demand Side: A divergence emerged between domestic and international demand. Foreign trade orders continued to provide some rigid demand support, with stable inquiries from overseas buyers. In contrast, domestic downstream markets showed weak willingness to chase high prices.

4. Next Week Market Forecast

Looking ahead, cautious wait-and-see sentiment persists among market participants. The propylene glycol market is expected to continue trading within a range.

Raw Materials: The domestic propylene oxide (PO) market has rebounded upward. During the National Day holiday, PO prices rose slightly before pre-holiday declines occurred. On the first day of the holiday, prices dropped sharply to low levels, followed by downstream buyers adopting a wait-and-see approach, leading to stabilization and consolidation. Subsequently, strong gains in propylene prompted some plants to suspend external sales, fostering a bullish outlook among observers. Operating plants maintained shipments, gradually reducing inventories to low levels. Prices saw continuous small increases throughout the holiday. Propylene breaking above RMB 10,000/ton, combined with post-holiday rigid demand from downstream users, provided further support. For the coming period, PO maintenance schedules and crude oil volatility will exert short-term influence, though these effects may diminish over time. The market is likely to see moderate price pushes followed by consolidation and negotiation.

Demand Side: Domestic unsaturated resin prices are expected to trend upward amid fluctuations next week. Cost support remains relatively solid, with spot prices likely to maintain strength. The market is expected to consolidate at high levels with a steady-to-rising price center. Specifically:

1. Supply Side: Overall operating loads at unsaturated resin plants are expected to increase slightly, with two additional units scheduled to commence production.
2. Demand Side: With resin prices remaining high, downstream willingness to chase price increases is limited. Spot transactions are primarily driven by rigid demand in small lots, resulting in a slower trading pace. As October begins, traditional "Silver October" peak season demand awaits verification; however, sustained raw material price hikes may lead to a slight increase in resin procurement volumes.
3. Cost Side: Major raw materials such as styrene and maleic anhydride are consolidating within high ranges, providing robust cost support for unsaturated resins.