Propylene Glycol

# Propylene Glycol Market Dynamics Intelligence and Analysis Forecast

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## I. Recent Market Dynamics Intelligence

### 1.1 Price Trends
| Indicator | Data (Reference Range) |
|------|-----------------|
| Industrial-grade Propylene Glycol mainstream quote | 7,800–8,600 CNY/ton |
| Pharmaceutical/Food-grade Propylene Glycol quote | 9,500–11,200 CNY/ton |
| East China region weekly average price QoQ | Slight decline of approx. 1.5%–3% |
| North China region weekly average price QoQ | Flat to slightly weak, fluctuation <1% |
| South China region weekly average price QoQ | Slight decline of approx. 2%, impacted by imported supply |

### 1.2 Supply-Side Dynamics
- **Domestic Plant Operating Rate**: Mainstream plants maintain operating rates in the 65%–75% range; some units have entered maintenance or reduced load operations due to compressed margins.
- **New Capacity Release**: Approximately 100,000–150,000 tons/year of new capacity is planned to come online in H2 2024, continuously accumulating supply pressure.
- **Raw Material End**: Propylene Oxide (PO) prices are under pressure, falling to 8,200–8,800 CNY/ton, weakening cost support.
- **Imported Supply**: Arrivals from South Korea, Thailand, and Saudi Arabia have increased, with noticeable inventory accumulation at East China ports.

### 1.3 Demand-Side Dynamics
- **Unsaturated Polyester Resin (UPR)**: Downstream demand is sluggish, with order volumes down approx. 5%–8% QoQ, dragged by the downturn in real estate and infrastructure.
- **Antifreeze/Coolant**: Seasonal demand has not yet started; the market is currently in the off-season with low purchasing willingness.
- **Pharmaceutical/Cosmetic Grade**: Demand is relatively rigid, but order growth for high-end grades is limited.
- **Polyurethane Sector**: Some substitution demand exists, but overall pull for propylene glycol is limited.

### 1.4 Inventory and Logistics
- Inventory at major East China ports has increased by approx. 8%–12% compared to last month; social inventory levels are moderately high.
- Logistics transportation costs remain stable; freight rates have not caused additional price disturbances.

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## II. Analysis of Core Influencing Factors

| Factor | Direction | Impact Level | Description |
|------|------|---------|------|
| Decline in raw material PO price | Bearish | ★★★★ | Cost-end support continues to weaken |
| Expectations of new capacity release | Bearish | ★★★★ | Long-term supply-side pressure persists |
| Downstream demand off-season | Bearish | ★★★ | Insufficient orders from major downstream sectors like UPR |
| Impact of imported supply | Bearish | ★★★ | Low-priced imported material suppresses domestic prices |
| Increased plant maintenance | Bullish | ★★ | Reduced load from some plants offsets supply increments |
| Expectations of macro policy stimulus | Slightly Bullish | ★★ | Implementation of real estate/infrastructure policies could boost demand expectations |

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## III. Analytical Judgment

### 3.1 Short-term Judgment (1–4 Weeks)
- **Prices are expected to oscillate weakly**, with mainstream industrial-grade propylene glycol prices likely trading in the 7,600–8,500 CNY/ton range.
- If PO prices continue to decline, further downside space for propylene glycol will be opened up.
- There are no significant positive drivers on the demand side; inventory depletion is slow, and the market is dominated by just-in-time purchasing.

### 3.2 Medium-term Judgment (1–3 Months)
- **The supply-demand imbalance (supply exceeding demand) remains unchanged**; the pace of new capacity release is a key variable.
- If PO prices stabilize and rebound, cost support for propylene glycol will repair temporarily, narrowing the price decline.
- Downstream demand is expected to improve marginally in Q4 (antifreeze peak season + year-end stocking), but the intensity will be limited.

### 3.3 Risk Warnings
- **Upside Risks**: Unexpected shutdowns of PO plants causing raw material price spikes; macro stimulus policies exceeding expectations.
- **Downside Risks**: New capacity coming online exceeding expectations; continuous shrinkage of downstream demand triggering price crashes.

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## IV. Price Forecast

| Time Horizon | Industrial-grade Forecast Range | Pharmaceutical/Food-grade Forecast Range | Trend Judgment |
|---------|--------------|-------------------|---------|
| Next 2 Weeks | 7,700–8,300 CNY/ton | 9,300–10,500 CNY/ton | Weak oscillation |
| Next 1 Month | 7,500–8,400 CNY/ton | 9,200–10,800 CNY/ton | Weak consolidation, testing the bottom |
| Next 3 Months | 7,400–8,600 CNY/ton | 9,000–11,000 CNY/ton | Range-bound fluctuation, watch for demand turning points |

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## V. Strategic Recommendations

| Role | Recommendation |
|------|------|
| **Producers** | Control inventory levels, flexibly adjust operating rates, monitor the narrowing PO-PG spread signal, and lock in profits at appropriate times. |
| **Traders** | Adopt a quick-in, quick-out strategy in the short term; avoid large stockpiling; monitor imported arrival schedules to time operations. |
| **Downstream Users** | May moderately restock at current low prices, but should not over-stockpile; wait for clearer demand signals. |