Propylene glycol

Recent Market Dynamics and Intelligence on Propylene Glycol

1. **Price Trends**
- Domestic propylene glycol prices have recently exhibited narrow-range fluctuations. The mainstream market price fluctuates within the range of [X] to [X + 500] RMB/ton. Due to supply-demand disparities across regions, price differences exist, with East China commands relatively higher prices, around [X + 200] RMB/ton, while North China prices hover around [X - 100] RMB/ton.
- Compared to the same period last week, the overall price fluctuation remained within [±100] RMB/ton, indicating relative market stability without significant sharp rises or falls.

2. **Supply Situation**
- The operating rate of domestic propylene glycol production enterprises remains at approximately [X]%. Some units that underwent previous maintenance are gradually resuming production, leading to an increase in market supply. However, a small number of enterprises remain shut down or operate at low capacity due to raw material shortages or equipment failures, which limits the overall increase in supply.
- Regarding imports, propylene glycol import volumes have remained stable recently, with port arrivals showing no significant change. Consequently, their supplementary effect on the domestic market supply is limited.

3. **Demand Situation**
- The operating rate of the downstream unsaturated polyester resin industry is around [X]%, maintaining steady demand for propylene glycol. As the traditional peak season gradually passes, some unsaturated polyester resin enterprises have seen a decline in order volumes, leading to slightly reduced enthusiasm for propylene glycol procurement.
- Demand from the cosmetics and daily chemical industries remains stable. Although seasonal factors may increase demand for certain propylene glycol-containing skincare products in winter, this effect has not yet been significantly reflected, resulting in minimal overall demand changes.
- The antifreeze industry has entered its off-season, leading to a noticeable reduction in demand for propylene glycol. Some enterprises have reduced or even paused their procurement volumes.

4. **Raw Material Situation**
- The primary raw material, propylene oxide, has experienced weak downward price trends recently, weakening cost support. With ample supply and insufficient downstream demand, propylene oxide prices have continued to slide, exerting pressure on the production costs of propylene glycol.
- The price of the other raw material, propylene, has also shown an oscillating downward trend, further reducing the production cost of propylene glycol.

5. **Market Sentiment**
- Traders and downstream enterprises are largely adopting a wait-and-see attitude towards the market outlook. Procurement remains cautious, with most buying only according to actual needs and avoiding large-scale stockpiling. Market transaction activity is moderate.
- Some production enterprises exhibit a willingness to support prices due to cost and inventory pressures. However, constrained by weak demand, it is difficult to push prices upward.


Analysis and Judgment

1. **Supply Side**: With the resumption of production from previously maintained units, market supply is expected to increase further, intensifying supply pressure. Nevertheless, the unstable operation of a few enterprises will somewhat alleviate the pressure of oversupply.

2. **Demand Side**: Downstream demand shows a divergent trend. While demand from the unsaturated polyester resin and cosmetics industries remains stable, demand from the antifreeze industry has decreased. Overall, there is insufficient momentum for demand growth, making it difficult to provide strong support for prices.

3. **Cost Side**: The declining prices of raw materials propylene oxide and propylene have reduced propylene glycol production costs. With diminished cost pressure, the motivation for producers to support prices weakens, limiting the potential for price increases.

4. **Market Sentiment**: Strong wait-and-see sentiment prevails in the market. Traders and downstream enterprises are cautious in their procurement, leading to inactive market transactions, which is unfavorable for price appreciation.


Forecast

1. **Short-term (1-2 weeks)**: Propylene glycol market prices will continue to fluctuate within a narrow range, likely between [X - 100] and [X + 300] RMB/ton. Increased supply and weak demand will continue to suppress prices, but with stable cost conditions, the likelihood of a significant price drop is low.

2. **Medium-term (1-2 months)**: If downstream demand in the unsaturated polyester resin industry fails to improve significantly, and demand in the antifreeze industry remains sluggish, coupled with continued weak performance in raw material prices, propylene glycol market prices may face downward pressure. Prices could potentially decline to the range of [X - 200] to [X + 100] RMB/ton.

3. **Long-term (Over 3 months)**: Attention should be paid to changes in downstream industry demand and raw material market trends. If downstream demand gradually recovers post-Spring Festival and raw material prices rebound, propylene glycol market prices are expected to stabilize and recover. Conversely, if demand remains sluggish and raw material prices continue to fall, propylene glycol market prices may continue to drop.