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    Home > Chemicals Industry > China Chemical > Propylene oxide: mismatched supply and demand prices plummeted

    Propylene oxide: mismatched supply and demand prices plummeted

    • Last Update: 2021-07-28
    • Source: Internet
    • Author: User
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    In the first half of the year, the average price of the domestic propylene oxide market fell below 14,000 yuan (ton price, the same below) after three shocks and declines
    .


    As of June 30, the average market price of propylene oxide was about 14,900 yuan (ton price, the same below), a drop of 4033.


    The market oscillated down three times

     The market oscillated down three times and the market oscillated down three times

    In the first half of the year, the propylene oxide market basically showed a trend of opening up and going down.
    After three shocks, the average price fell below 14,000 yuan
    .

    According to Sun Shanshan, a propylene oxide analyst at Jinlianchuang, the first shock lasted from the beginning of the year until February
    .


    At the beginning of the year, the average price of propylene oxide market started at a high of 18,900 yuan.


    The second shock began in early February and lasted until early April
    .


    On the eve of the Spring Festival, some of the terminal factories that stopped work late were concentrated on stocking, and the inventory pressure of the propylene oxide factories dropped, which promoted the market to rise slightly


    The third shock began in early April and lasted until mid-to-early June
    .


    In early April, although new production capacity of propylene oxide entered the market, the operation of Shandong Sanyue installations was unstable, and Dongying Huatai and Xinyue installations reduced load and scrubbers.


    Increase in supply and contraction is the main driver

     The increase in supply and demand is the main driving force  The increase in supply and demand is the main driving force

      According to Ren Xiaona, a propylene oxide analyst at Longzhong Information, the main driving force for the decline in the propylene oxide market is the continuous increase in supply and the simultaneous contraction of domestic and foreign demand
    .


    Especially after the new production capacity landed, the mismatch of supply and demand contributed to the high dive of the propylene oxide market


      From the perspective of production capacity, since the fourth quarter of last year, a number of new or technically modified propylene oxide plants have landed on production capacity
    .


    In October 2020, Jishen’s 300,000 tons/year plant restarted, and Xinyue increased its production capacity by 30,000 tons/year in late December; in late March 2021, Sinochem Quanzhou’s 200,000 tons/year and CNOOC and Shell’s 300,000 tons/year equipment Production was put into operation at the same time, and the 80,000 tons/year production capacity of Sanyue's technological transformation was landed in late April


      In terms of downstream demand, in the first four months of this year, polyether exports continued to be strong.
    Net exports increased by 81,100 tons compared with September and December last year, which is equivalent to more than 60,000 tons of propylene oxide consumption equivalent, which offsets part of the increase in propylene oxide.

    .

      Beginning in May, downstream demand slowed down and even began to shrink
    .


    Although the cumulative output of polyether's main downstream soft foam furniture increased by 62.


      In terms of external demand, overseas freight rates continue to rise, containers are difficult to find, and the security situation in Southeast Asia continues to escalate, which has suppressed foreign trade demand
    .

      During the same period, propylene oxide entered a stage of high start-up and high supply, and the market supply continued to increase
    .


    From January to May, the average monthly domestic supply of propylene oxide was around 340,000 tons, an increase of more than 20% over the same period last year


      In summary, supply continues to increase, while downstream demand shrinks, causing the overall propylene oxide market to fall
    .

      Short-term higher and long-term downward

    Short- term high and long-term downward

      "From a short-term perspective, the domestic propylene oxide market has a clear pattern of tight supply and demand
    .
    Although individual devices are currently in decline, but large-capacity devices continue to shut down, the overall operating rate is difficult to recover to a high level in the short term, and the market will rise strongly
    .
    " Chen Xiaohan, a propylene oxide analyst at Yu Information, believes
    .

      At present, the supply side is affected by heavy rain weather and individual equipment failures, and the overall operating load has dropped significantly compared with the previous period
    .
    After the traffic control in early July, the propylene oxide transportation situation has recovered, but some devices have not been lifted to the normal load
    .
    Coupled with the recent torrential rains in many parts of the country, especially the continuous torrential rains in the northern region, some installations have been temporarily shut down, further aggravating the tightness of the goods atmosphere, and the tight supply and demand has caused the market to accelerate upward
    .

      From the demand side, recently, some polyether devices have been actively purchased, and the previous orders have not been completed, and the price increase has exceeded that of propylene oxide
    .
    The current market prices of other major downstream propylene glycol and dimethyl esters are also operating at a high level, and foreign trade demand is better, and the demand side is actively purchasing, which has strong support for the propylene oxide market
    .

      In the long term, Tianjin Dagu’s 200,000-ton/year propylene oxide plant is planned to be put into operation, and Yantai Wanhua’s 300,000-ton/year new plant is expected to be put into operation in the fourth quarter, and the import volume will also increase from the first half of the year
    .
    The domestic and foreign trade markets on the demand side have improved, but they are also facing new supply.
    It is expected that the propylene oxide price volatility will slow down in the second half of the year, and the overall price center will shift down from the first half of the year
    .

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