The demand season is not strong, and the market outlook for propylene oxide is mainly volatile
Latest News: The “Golden Nine” of the propylene oxide market continued the previous rally, and the market broke through the 10,000 yuan (ton price, the same below) mark. Taking the Shandong market as an example, on September 15, the market price rose to 10,500 to 10,600 yuan, an increase of about 1,000 yuan from the end of August. It fell back to around 9,800 yuan on September 20. Looking at the market outlook, the supply side is expected to grow, the demand season is not strong, and propylene oxide fluctuates at 10,000 yuan.
Device reboot provisioning increased
Meng Xianxing, deputy director of Shandong Chemical Industry Research Institute, said that propylene oxide encountered Waterloo in July, and the price fell below 8,000 yuan. After that, the market bottomed out and rebounded. The market supply fluctuated frequently in August. Leading the uptrend, bucking the trend. As of August 31, the mainstream transaction price of Shandong propylene oxide market was 9600-9700 yuan, and the market continued to rise in September.
The price increase is not unrelated to the reduction in supply. In August, a total of 8 sets of propylene oxide units were overhauled in China, involving a total production capacity of 1.222 million tons per year and a total loss of 61,500 tons. In August, the output of domestic propylene oxide plants was 293,200 tons, down 2.17% from the previous month, and the capacity utilization rate was 70.83%.
After entering September, Sinochem Quanzhou propylene oxide plant was shut down for maintenance, Tianjin Bohua, Sinopec Changling, Shandong Huatai and other plants restarted one after another, and Jinling plant was reduced to half-load operation. At present, the operating rate of propylene oxide is close to 70%, which is slightly lower than that in August.
Looking at the market outlook, Shandong Daze’s 100,000-ton/year unit will resume production in late September, and Jincheng Petrochemical’s 300,000-ton/year unit is expected to be put into operation by the end of September; Jinling and Huatai units will gradually resume production, and the supply side will be mainly incremental. There must be more bearish sentiment among traders. It is expected that the propylene oxide market will show a stalemate and weakened trend under the increase of supply concentration, and there is a slight downside risk.
The raw material support is expected to be difficult to be strong
For the upstream raw materials propylene and liquid chlorine, although “Golden Nine” ushered in a wave of rising prices, the market outlook is expected to be easy to rise and difficult to rise, and it is difficult to form a strong pull for the downstream.
In September, the price of upstream raw material propylene continued to fluctuate and rise, which also provided strong support for the propylene oxide market. Wang Quanping, chief engineer of Shandong Kenli Petrochemical Group, said that the domestic supply of propylene remained tight, and the northwest, central and east China regions showed more obvious performance. In addition, some maintenance devices downstream of propylene such as azine butanol, Dagu propylene oxide, Kelu Acrylonitrile, etc. have resumed work, so the market demand has been pulled up, the sales of propylene companies have been smooth, and the low inventory has driven the price of propylene to rise.
From the perspective of plant operation, on the one hand, Xintai Petrochemical and Luxi Chemical propylene plants restarted, but due to frequent delays, the impact was relatively limited. At the same time, some new production capacity of propane dehydrogenation to propylene in Shandong was less than expected, and the overall supply was relatively controllable. On the other hand, some major plants in the northwest have been shut down for maintenance recently, and the propylene production in the northwest has dropped to 73.42%. The circulation of peripheral propylene supply has been significantly reduced, and individual northwest factories have stored propylene for external mining, and peripheral propylene supply has been significantly tightened.
Looking at the market outlook, the installation load of propylene enterprises is relatively stable, and there is no obvious change in the propylene supply. The downstream weakened with the polypropylene disk, suppressing the enthusiasm for downstream buying of propylene. Therefore, the current propylene market is in a situation of weak supply and demand, but the downstream industries such as octanol, propylene oxide, and acrylonitrile have increased loads, and there is still some support on the rigid demand side.
Another raw material liquid chlorine market is dominated by the above players. The sales volume outside the maintenance of some installations in the main factories decreased slightly, and the installations of some manufacturers in central Shandong were unstable, which supported the market to continue the upward trend to a certain extent. The main downstream of East China has recovered, demand has eased, and some devices have been shut down for maintenance, and supply has been reduced. Meng Xianxing said that with the recovery of production reduction devices and the increase in supply, the price of liquid chlorine may be lowered in the later stage.
Low demand is hard to thrive in peak seasons
Polyether polyol is the main downstream product of propylene oxide and the main raw material for synthesizing polyurethane. The overall production capacity of the domestic polyurethane downstream industry is overcapacity, especially the excess pressure in the soft foam market.
Meng Xianxing said that in September, driven by the cost, the soft foam polyether market rose, and the main players continued to support the market, but the downstream performance was average, and the low prices in the middle and lower reaches still existed.
At present, the downstream sponge has steadily increased, and the upstream cost still needs to be further transmitted. The middle and lower reaches are mostly waiting for digestion, and the real market continues to be light. From the perspective of the market outlook, although the actual negative situation has not yet formed, many manufacturers still lack space due to cost control, and their role in supporting upstream raw materials is limited.
Another downstream rigid foamed polyether market maintained a warm and upward trend, and the middle and lower reaches continued to buy on demand. Although the overall activity was lower than the same period, it was improved compared with the second quarter. Although it has entered the “Golden Nine”, the market demand has not changed significantly, and the factory can determine the production according to the needs.
From the perspective of the market outlook, downstream enterprises mainly wait and see, and the willingness to purchase new orders is general. Under the situation of two weak trading, the rigid foam polyether “Golden Nine” is of insufficient quality, and it is difficult to inject vitality into the upstream.