The prices of propylene oxide (PO) and polyether polyols have been rising since the end of the Chinese New Year. But the pace remained steady at an average price increase of around RMB100/ton each time. The interval remained 2 to 3 days. Currently, the shipment of PO is normal. It is converted into polyether polyols, propylene glycol and other downstream products. But downstream polyether polyols plants have not fully resumed normal operation. Thus, the dealers are active, whereas downstream customers are less involved in the transaction.
Recently, some of our clients consultedwhether a major manufacturer in north China has started operation, and how it will affect the price in the future. Some customers were bearish on the market.Itis convinced that in the short term, neither a sharp drop nor a sharp rise is likely to take place for the following reasons:
A sharp drop is unlikely to happen for the following reason:
Into March, the domestic and foreign PO plants began to undergo turnaround. It is heard that in early March, a PO manufacturer in Shandong will perform maintenance for a month. But its running load will stay at around 70%, with limited reduction in production. According to market sources, a PO producer in east China also has a plan to overhaul its facilities in March and April. At the same time, PO manufacturers in Thailand and South Korea will cease operation in March for turnaround, which will last for a month.
A manufacturer in Shandong has a maintenance plan for May and June. Three manufacturers in Japan and Singapore have maintenance plans for May.
The first session of 13th National Committee of the Chinese People's Political Consultative Conference (CPPCC) and the 13th National People's Congress (NPC) began on March 3rd and 5th respectively. Temporary traffic control measures have been introduced by some cities for the conferences. From 0:00 March 1 to 24:00 March 25, vehicles carrying hazardous chemicals (including highly toxic chemicals) are prohibited from driving on the roads under the jurisdiction of the cities. After obtaining relevant certificates, those vehicles indeed needing to enter these areas can drive on these roads. It is expected that during the conferences, transportation of chemicals in some areas will be restricted. But according to previous experience, the conferences have little impact on the transportation and price of the chemical.
Into March, the PO supply will continue to be tight. Exports from foreign manufacturers will decrease while domestic manufacturers undergoing turnaround. But there is no need to worry because PO manufacturers in Japan, Singapore and South Korea export little to China (the three countries account for only 0.04% of China’s PO imports). Only exports from Thailand have a great impact on China's PO market.
A sharp rise is unlikely to happen for the following reason:
After the Spring Festival, polyether polyols manufacturers continued to purchase PO. As a result, PO manufacturers accumulated some inventories. It is expected that after March, as downstream manufacturers resume normal operation, these inventories will be gradually sold off.
According to market sources, after March two domestic HPPO manufacturers will start up their plants. Despite the fact that it is hard for the two plants to operate at full capacity at the initial stage, their total capacity remain high. After the facilities are put into operation, the short supply of goods will be alleviated.
In summary, the prices for PO and polyether polyols are expected to continue to rise slightly and steadily.
for price or more information, pls feel free to contact with me at email@example.com