Propylene oxide: Tight supply soared twice

In 2020, wide oscillations will become the main theme of the propylene oxide market
.
After the sharp drop in the propylene oxide market in the first half of the year, the second half of the year seemed like a godly help, starting a five-month-old rise in the market.
Although there has been a callback since then, it was quickly corrected
.
By the end of the year, the market price of propylene oxide was 18,700 yuan (ton price, the same below), an increase of 85.
9% during the year, ranking second in the increase list
.
Review of the market in 2020.
In the first half of the year, the epidemic broke out, and downstream companies mostly delayed resumption of work.
With little demand, the price of propylene oxide dropped sharply
.
Since then, although the domestic epidemic has been brought under control, the foreign epidemic has worsened, and the loss of control of crude oil has caused the entire industry to worry, and the market has continued to fall
.
The price of propylene oxide hit a three-year low in early April, and the ex-factory price in Shandong was only 6,400 yuan
.
Since then, large-scale installations at home and abroad have been repaired in turn, and the downstream has just gradually recovered, and the market has started a unilateral upward trend of bottoming out.
In June, the price of propylene oxide exceeded the 10,000 yuan mark for the first time
.
In the second half of the year, driven by favorable supply and demand, the price of propylene oxide rose all the way, breaking the highest record in the past 10 years, rising by 12,300 yuan from the lowest point, an increase of 192.
19%
.
Since then, after a sharp drop in the fourth quarter, it rebounded soaring again
.
Profits also performed well, with a total of more than 3,400 yuan for the whole year, which was double that of 2019
.
Chen Xiaohan, an analyst at Zhongyu Information: In addition to the improvement in demand for controlled epidemics, the two rises also contributed to the favorable supply side
.
The Wanhua plant has been shut down for more than two months since April, and the domestic propylene oxide company's operating rate in April was only 55.
32%.
Since then, as supply and demand have benefited, profits have rebounded, and the industry has increased production
.
Although the Jishen device restarted in October, foreign Saudi Arabia, Japan, South Korea, Singapore and other devices have undergone periodic maintenance, and the import volume has been reduced, which has also aggravated the domestic supply shortage
.
Since November 10, Jinling Huntsman's plant has been shut down for 55 days for maintenance, and the market supply has tightened again, boosting the price of propylene oxide to soar for the second time
.
The supply side of the domestic propylene oxide market was tight throughout the year
.
Outlook for 2021: Keep cautiously optimistic about downstream demand.
He Junsong, Jilin Petrochemical Sales Company: From the perspective of the downstream polyether industry of propylene oxide, due to the impact of the epidemic, the production time of some new polyether devices has been postponed.
As terminal demand recovers, new devices will be added It will start production in the second half of 2020, and it is expected to add 560,000 tons of new production capacity per year in 2021
.
In addition, the global "home economy" emerging under the epidemic has brought export dividends to China's home appliance industry
.
Beginning in June 2020, China's refrigerator and freezer exports have shown a rapid growth trend, with a year-on-year growth rate of more than 20%.
By August to September, the growth rate has exceeded 60%, ushering in a long-lost blowout
.
In the third quarter, domestic enterprises have basically resumed production, most of the factories are in full production, the products are mainly exported, and the delivery period is also continuously extending
.
Not only that, the signing of RCEP also created a major market opportunity for China's home appliance exports and brought benefits to the polyurethane industry
.
In the first three quarters of 2020, China exported more than 7.
3 million refrigerators and freezers to RECP member countries, accounting for nearly 16% of exports.
After the implementation of the agreement, there is still room for improvement in this data
.
In addition, the RCEP signing is also extremely beneficial to another important downstream furniture market of polyurethane
.
When the RCEP starts to operate, the export volume of Chinese household products in these regions is expected to increase
.
Prior to this, ASEAN, Japan, South Korea, New Zealand, and Australia imposed tariffs of 3% to 5% on domestic exports of household products
.
After the RCEP is signed, this part of the tax point may be gradually reduced or even "zero tariff", which will promote the continued growth of exports and benefit the propylene oxide market
.
Supply expected to increase Jinlianchuang analyst Sun Shanshan: From the perspective of supply, domestic new capacity projects with a higher realization rate of propylene oxide in 2020, such as Jinling Huai’an Phase 1 150,000 tons/year HPPO plant, and CNOOC and Shell’s 290,000 The ton/year PO/SM device, Sinochem Quanzhou’s 200,000 ton/year PO/SM device, and Tianjin Dagu’s 200,000 ton/year PO/SM device have all been delayed due to the impact of the epidemic
.
If these capacities are released in 2021, they will suppress the propylene oxide market
.
In addition, in the past two years, the production of propylene oxide as a raw material for propylene has entered a blowout period, refining and chemical integration projects are surging, and upstream and downstream supply pressures are increasing
.
But overall, the supply of propylene is growing faster than downstream demand, and the market is still not optimistic in the later stage, and it is difficult to form a strong cost support for propylene oxide
.
However, for the highly concentrated propylene oxide industry, it is not ruled out that manufacturers take measures such as restricting production and price, and there is little risk of a sharp drop in the market
.