Key Market Focus This Week
Supply: During the week, Xinyue increased its operating load, while Jinling maintained normal operations. Binhua, Qixiang, Liuhua Yi, and Hangjin slightly reduced their loads. Yida restarted production, resulting in a marginal increase in output with no significant overall change. Total weekly production reached 127,900 tons, an increase of 300 tons from the previous period. The capacity utilization rate stood at 68.26%, up by 0.12 percentage points from the last period.
Costs: The average weekly comprehensive profit for propylene oxide (PO) produced via the chlorohydrin process was -1,418.81 yuan/ton, representing a month-over-month decline of 43.26%. The theoretical profit for PO produced via the HPPO process was -1,723.46 yuan/ton, down 21.39% from the previous period.
Weekly Market Analysis
This week, the domestic propylene oxide market continued to follow a pattern of initial recovery followed by a decline. Towards the end of last week, after prices hit relatively low levels, shipping conditions improved slightly. Short-term adjustments in upstream feedstock availability for certain on-site units also helped boost market sentiment, leading to a sharp rebound over the weekend. However, as the price increase was somewhat excessive, downstream acceptance weakened, preventing the upward trend from being fully sustained across the entire market. Throughout this week, market participants adopted a wait-and-see approach amid falling crude oil prices, causing downstream activity to become even more sluggish. Prices gradually declined through negotiations. By mid-week, when spot ex-factory prices in Shandong dropped to 11,000 yuan/ton, there was a brief recovery in market sentiment. Nevertheless, the significant drop in the key raw material, propylene, along with cooling polyether transactions, led the market to turn weak again. As of Thursday, November 12, mainstream spot ex-factory prices in Shandong ranged between 10,700 and 10,800 yuan/ton.
Propylene oxide operating rates saw a slight increase during the period: Xinyue raised its load, Jinling operated normally, while Binhua, Qixiang, Liuhua Yi, and Hangjin slightly reduced their loads, and Yida restarted. On the cost side, propylene prices fell from high levels, while liquid chlorine prices remained firm, widening losses for representative production processes. On the demand side, cautious sentiment prevailed throughout the week. When PO prices dropped to the 11,000 yuan/ton ex-factory level mid-week, some moderate restocking occurred, releasing rigid demand. End-users also made some purchases, but this momentum lacked sustainability, and the market turned weak again today.
Looking ahead, propylene prices are expected to fluctuate within a narrow range, while liquid chlorine prices are likely to remain stable or rise slightly, providing mild support to costs. On the supply side, Sanyue and Hangjin may slightly increase their operating loads, while Qixiang, Liuhua Yi, and Binhua are expected to continue reducing their loads. Yida will maintain stable operations, Guoen may release small quantities of product, and Zhejiang Petrochemical is undergoing shutdown maintenance. After offsetting these factors, total supply volume is expected to remain roughly flat, though cost pressures could lead to short-term reductions in output; specific developments should be monitored closely. Downstream demand is expected to remain cautious, with buyers waiting for further price declines before making limited follow-up purchases. Currently, the market lacks clear positive catalysts and is likely to continue its weak trend until supportive factors emerge.
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