Propylene oxide

Epoxy Propane Market Dynamics Intelligence

I. Price Trend
- Latest Price: As of May 25, 2026, the Business Network’s benchmark price for epoxy propane stands at RMB 9,200.00 per ton, representing a 10.39% decline from the beginning-of-month price of RMB 10,266.67 per ton.
- Recent Volatility: On May 22, the spot quotation for epoxy propane was RMB 9,200 per ton, up RMB 200 (a 2.22% increase) from the previous day; however, it declined by RMB 300 (a 3.16% decrease) over the past week and by RMB 1,800 (a 16.36% decrease) over the past month.
- Historical High: In April, the epoxy propane market experienced a 'surge-and-correction' pattern, with prices climbing continuously to RMB 13,300 per ton at the start of the month before rapidly retreating due to shifts in supply-demand dynamics.

II. Supply-Demand Relationship
- Supply Side:
- In April, multiple major production facilities in Shandong and East China regions entered scheduled maintenance periods simultaneously, resulting in a notable drop in industry operating rates and persistently low social inventories.
- In May, several previously idled facilities resumed operations, raising expectations for increased market supply; however, overall plant utilization remains relatively low, and manufacturers’ inventory pressure remains manageable.
- Demand Side:
- In April, the State’s cancellation of export tax rebates for polyether triggered a rush among downstream enterprises to secure orders and build inventories. Concurrently, robust underlying demand from sectors such as home appliances, automotive, and new energy contributed to concentrated procurement activity.
- In May, downstream enterprises intensified their resistance to high raw material prices, leading to a marked weakening in demand; procurement activities have turned cautious and demand-driven.

III. Cost Support
- Raw Material Prices: Propylene—the core feedstock for epoxy propane—accounts for over 60% of production costs. In April, propylene prices surged from RMB 6,400 per ton at the end of February to above RMB 9,000 per ton, rising more than 40%, driven by rising international crude oil prices and geopolitical tensions in the Middle East—providing strong cost support for epoxy propane.
- Cost Pass-through: Despite elevated raw material prices, epoxy propane production margins have been substantially squeezed, with some production processes reverting to losses—thereby weakening the effectiveness of cost-based price support.

IV. Market Sentiment and Outlook
- Market Sentiment: In May, epoxy propane prices reverted to levels near the cost floor; certain production routes again incurred losses, reinforcing cost support. However, downstream participants remain cautious and observant amid market volatility, engaging only in limited, opportunistic purchases.
- Divergent Expectations: Some analysts anticipate continued tight supply conditions ahead, suggesting limited downside potential for prices and an overall high-range trading pattern. Others contend that weakening downstream demand and anticipated declines in raw material prices may confine epoxy propane prices to narrow-range fluctuations.

Analysis & Assessment

I. Drivers of Price Volatility
- Short-term Rebound: The price rebound on May 22 was primarily attributable to prior overselling, renewed maintenance expectations for certain facilities, and downstream restocking activities.
- Long-term Trend: The price correction since April has largely stemmed from shifting supply-demand fundamentals—namely, the resumption of previously idled facilities on the supply side and heightened downstream resistance to elevated raw material pricing.

II. Core Contradictions
- High-Cost vs. Weak-Demand Dilemma: While propylene prices remain elevated, downstream demand is lackluster and procurement behavior increasingly cautious—compressing epoxy propane production margins and depriving the market of sustainable upward momentum.
- Supply-Side Uncertainty: The coexistence of planned facility maintenance and restart expectations introduces volatility into supply, thereby exerting intermittent influence on pricing.

Forward Outlook

I. Price Trend
- Short Term: Epoxy propane prices are expected to fluctuate within a narrow range; key watchpoints include international crude oil prices, propylene market developments, and downstream procurement rhythms.
- Medium Term: Should raw material prices remain elevated and supply constraints persist, epoxy propane prices may stabilize and rebound. Conversely, if downstream demand remains sluggish or raw material prices fall significantly, further downward pressure on prices could emerge.

II. Supply-Demand Relationship
- Supply Side: With previously idled facilities gradually returning online, market supply is expected to increase; nevertheless, overall operating rates remain subdued, limiting immediate supply-side pressure.
- Demand Side: Downstream resistance to high raw material prices is likely to persist, keeping procurement cautious and demand-driven; yet, resilient underlying demand from home appliance, automotive, and new energy sectors continues to provide foundational support.

III. Risk Alerts
- Raw Material Price Volatility: Fluctuations in international crude oil prices and the propylene market significantly influence the strength of cost support for epoxy propane.
- Supply-Demand Shifts: Uncertainties—including facility maintenance schedules and the pace of downstream demand recovery—may trigger substantial price volatility.
- Policy Impact: Monitor national policy developments affecting both epoxy propane and its downstream products.