Since February, the domestic propylene oxide market has shown a steady rise, and under the joint effect of the cost side, supply and demand side and other favorable factors, the propylene oxide market has shown a linear rise since the end of February. As of March 3, the export price of propylene oxide in Shandong has risen to 10900-11000 yuan/ton, a new high since June 2022, 1100 yuan/ton or 11% higher than the price on February 23.
From the perspective of supply, Ningbo Zhenhai Refining and Chemical Plant Phase I was shut down for maintenance on February 24. The estimated time was about one and a half months. The performance of spot resources in the southern market was tight, while the changes in the northern enterprises’ devices were not large. Some enterprises had negative operation, and the low inventory of enterprises had limited sales. There was some positive support in the supplier market; In addition, the production of new capacity is not as expected. Tianjin Petrochemical Plant was shut down in mid-February to eliminate defects. Satellite Petrochemical maintained low load operation. Although qualified products were produced, they were not exported in large quantities. Shandong Qixiang and Jiangsu Yida plants have not yet resumed production. Jincheng Petrochemical is expected to be put into production in March.
In terms of demand, after the Spring Festival holiday in China, the overall recovery of domestic demand and exports in various domestic industries was less than expected. However, due to the high price of propylene oxide, the price of downstream polyether rose passively, the market was relatively positive in purchasing and stocking, and the price of propylene oxide remained high. Supported by the mentality of buying up and not buying down, the recent downstream polyether enterprises followed up more and more incrementally, driving the market of propylene oxide to continue to improve.
In terms of cost, in the aspect of propylene, the recent delivery pressure of propylene production enterprises has eased and the offer has rebounded. Driven by the recovery of polypropylene futures, the overall market trading atmosphere has improved, and the transaction center has pushed up. As of March 3, the mainstream transaction price of propylene in Shandong Province has been 7390-7500 yuan/ton; In terms of liquid chlorine, due to the improvement of downstream auxiliary chlorine consumption devices, the external sales volume of liquid chlorine has declined, supporting the price to rise to the high level of 400 yuan/ton again. Supported by the rising price of liquid chlorine, as of March 3, the PO cost of chlorohydrin method increased by about 4% compared with February 23.
In terms of profit, as of March 3, the PO profit value of chlorohydrin method was about 1604 yuan/ton, up 91% from February 23.
In the future, the propylene market at the raw material end may continue to increase slightly, the liquid chlorine market may maintain a strong operation, and the support at the raw material end is still obvious; The supplier is still tight, but it is still necessary to wait and see the operation of the newly put into operation; On the demand side, in the traditional peak demand season in March, the terminal demand of polyether market may maintain a slow recovery momentum, but due to the current forced higher price of polyether, the purchasing sentiment may have a slowing trend; On the whole, there is still support for short-term supplier benefits. It is expected that the propylene oxide market will maintain stable, medium and strong operation in the short term, and we will wait for the downstream polyether orders.