The Market Price of Propylene Oxide Saw an Initial Decline Followed by a Rise This Week (June 1-4)

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The market price of propylene oxide fluctuated this week, initially falling before rising. According to the SunSirs monitoring system, the benchmark price for propylene oxide stood at 9,000 RMB/ton as of June 4, marking a 1.12% increase compared to June 1.

Market analysis

Raw Materials: This week, the propylene market saw prices consolidate at a low level as units undergoing maintenance returned to operation en masse, offering limited cost support to propylene oxide. According to the SunSirs monitoring system, the benchmark price to propylene stood at 9,004.33 RMB/ton as of June 4, marking a 1.42% decline compared to the beginning of the month (9,134.33 RMB/ton).

Supply side: A contraction in supply this week was the key factor driving the market to stabilize and rebound. Zhenhai Phase I and Shenghong remained offline; Ruiheng and Sanyue slightly raised operating rates, though the increase was limited; and Jinling, Xinyue, and Zhejiang Petrochemical operated at reduced rates. Concentrated unit shutdowns and reduced operating rates led to a temporary tightening of spot supply. With inventory pressure easing, producers became greater inclined to manage sales volumes, providing fundamental support to the price recovery.

Demand side: Downstream consumption of propylene oxide remains dominated by polyether polyols, accounting to over 75% of the total. Early in the week, downstream players maintained a cautious "wait-and-see" stance; feedback on new orders was lackluster, with only limited volume added. However, as the market continued to decline—thereby releasing the risk of further drops—wait-and-see sentiment eased somewhat, leading to a gradual resumption of downstream purchasing and a slight recovery in market trading activity. Nevertheless, overall demand remains constrained by the traditional off-season; operating rates at major downstream polyether vegetation have seen limited improvement, and purchasing is largely driven by immediate needs, meaning demand-side support requires further strengthening.

Market Outlook:

Analysts at SunSirs believe that the propylene oxide market bottomed out this week, driven by a wave of production rate cuts across supply-side facilities, with prices rebounding from their lows. However, constrained by generally weak downstream demand and sluggish trading within the polyether chain, the market lacks sufficient momentum to a full reversal; future trends will depend heavily on changes in operating rates and the recovery of end-market orders.

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