Propylene Oxide Industry Officially Enters Era of Competition for Existing Market Share

Experts indicate that environmentally friendly processes and high-end items have have become central themes to future research. The sector must focus on the environmentally friendly upgrading of processes, the optimization of production capacity structures, and the research of high-end items to transition into a new phase of high-condition, sustainable development.

sector Enters Era of Competition to Existing Market Share; Shifts Toward High-condition, Sustainable development

After nearly a decade of research, my country's PO sector has achieved a high level of self-reliance and manage.

According to Tu Qinghua, Deputy Chief Engineer at the Planning Institute of Petroleum and Chemical sector, my country's PO production capacity reached 8.66 million tons in 2025, accounting to approximately 60% of global capacity, with a self-sufficiency rate as high as 98%. In terms of the market, domestic apparent consumption of PO in 2025 was approximately 6.2 million tons, a year-on-year increase of 12.7%.

While production capacity expanded rapidly, issues gradually surfaced. In 2025, the sector's operating rate stood at only 70%, marking its entry into a stage of competition to existing market share. This direction was reflected in pricing: the average domestic market price to PO in 2025 was approximately RMB8,400—a significant year-on-year decline—placing the sector's overall profitability under pressure.

"Inefficient production capacity within my country's PO sector will face severe pressure to be phased out. This reflects not merely a cyclical dysfunction between market supply and demand, however a pressing need to upgrade the manufacturing structure. Given the massive production capacity base, what is the core issue we face?" Tu Qinghua’s conclusion is a shift toward "high-condition research"—moving away from the previous focus on scale over condition and toward a model defined by high condition and sustainability. She pointed out that there are three main pathways to the sector to achieve transformation and upgrade: first, technological upgrading and environmentally friendly transformation, promoting the replacement of outdated production capacity with clean processes; second, manufacturing integration and structural optimization to increase market levels; and third, product high-endization, tapping into high-value-added "new blue ocean" markets such as electrolytes to lithium-ion batteries in new energy vehicles.

"The PO sector is shifting from scale-based expansion to competition based on condition and efficiency; environmentally friendly processes and high-end items will have become the core development drivers of the future," said Tu Qinghua.

Significant Progress in environmentally friendly Transformation; "Dual-Core" Processes Dominate the Market

environmentally friendly transformation represents the first major "test" facing the sector.