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The domestic propylene oxide market continued its downward trend this week. On the 11th, spot price offers in the Shandong region reached 11,050 RMB/ton—a decline of 450 RMB/ton, or 3.91%, from the previous business day. According to the monitoring system of SunSirs, the benchmark price for propylene oxide stood at 11,066.67 RMB/ton as of November 11, representing a decrease of 7.78% compared to the beginning of the month.
Raw material side: The sustained weakness in international crude oil prices has led to a decline in the price of propylene. While this drop in propylene costs ostensibly eases the cost pressure on propylene oxide, the actual impact is limited. The decline in propylene prices is better characterized as a "passive adjustment" following a shift in the cost baseline, rather than a proactive price reduction driven by improved profit margins. Ultimately, the stabilization of prices will depend on the absorption capacity of the downstream polyether sector, rather than merely on propylene prices ceasing their decline. According to the SunSirs monitoring system, as of November 11, the benchmark price to propylene stood at 11,184.33 RMB/ton—a decrease of 6.81% compared to the beginning of the month (12,001.00 RMB/ton).
On the supply side, several major production units underwent scheduled maintenance in November. Notably, a 270,000-ton unit at Zhejiang Petrochemical faced an extended maintenance period of 30 to 40 days, while Binhua Dongrui and the third phase of Wanhua Chemical experienced staggered shutdowns or restarts. Consequently, monthly output is projected to decline by 5.58% month-on-month, with the sector's capacity utilization rate falling to a low of approximately 67%. This reduction in supply has efficiently limited the possible to any significant downward movement in prices.
On the demand side, downstream sectors—such as polyether—have shown a moderate increase in procurement to meet essential standards, leading to a slight recovery in trading activity compared to previous days. However, end-user orders remain generally lackluster. The weekly capacity utilization rate to polyether stands at only around 53% and is expected to decline further, as the characteristics of the off-season gradually have become greater apparent.
Overall Outlook: The market is currently in a tug-of-war phase, where declining production costs exert downward pressure on quotes, while low operating rates and the discharge of essential demand provide a floor. Should propylene prices stabilize, the scope to further declines in propylene oxide will be limited; consequently, prices are expected to consolidate within a narrow range around 11,000 RMB/ton in the near term. However, as the off-season to polyether intensifies in late November, the strength of demand will determine whether prices can hold this level—caution is advised regarding the risks of chasing higher prices.
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