High-Rebound Polyether H5000

High-Resilience Polyether H5000: Recent Market Dynamics

I. Price Trends
1. Domestic Market:
- East China Region: The price of high-resilience polyether H5000 has fluctuated in the range of 12,500–13,000 RMB/ton recently, representing an increase of approximately 3.5% compared to the previous month. This rise is primarily driven by cost support from propylene oxide (PO) raw materials and rigid demand procurement from downstream foam manufacturers.
- South China Region: Prices remain stable at 12,800–13,200 RMB/ton. Some traders have slightly raised quotations due to low inventory levels, but actual transactions are mainly based on negotiation.
- North China Region: Prices are stable at 12,300–12,700 RMB/ton. The price gap between regions has narrowed, and the impact of logistics costs has diminished.

2. International Market:
- Southeast Asia Market: CFR China main port prices are quoted at 1,650–1,700 USD/ton. Import costs have increased due to fluctuations in the RMB exchange rate and delays in shipping schedules.
- Europe and America Markets: FOB US Gulf prices are at 2,100–2,200 USD/ton. Prices are under pressure to decline due to weak demand and high inventory levels.

II. Supply and Demand Dynamics
1. Supply Side:
- Domestic Capacity Utilization: The industry average operating rate is approximately 75%, a 5 percentage point increase from the previous month. This is mainly due to the restart of some maintenance units (such as capacity release from Wanhua Chemical and Hongbaoli).
- Import Volume: October import volume decreased by 12% month-on-month. This is mainly because overseas suppliers prioritized the European and American markets, and the domestic price advantage weakened.
- Inventory Levels: Production enterprises' inventory turnover days have dropped to 10–12 days. Traders hold low inventory, and their willingness to replenish stocks remains cautious.

2. Demand Side:
- Downstream Foam Industry: Demand in the furniture and automotive seat sectors remains stable. However, due to the downturn in the real estate industry, order growth for mattress foam has slowed.
- Footwear Industry: Seasonal recovery in demand for sports shoe materials has occurred, but orders from small and medium-sized factories are mainly short-term, with limited acceptance of high raw material prices.
- Impact of Substitutes: The low-price operation of regular soft polyether has led some downstream enterprises to switch to low-cost alternatives, squeezing demand for high-resilience polyether.

III. Costs and Profits
1. Raw Material Prices:
- Propylene Oxide (PO): The mainstream market price has risen to 9,500–9,800 RMB/ton, a monthly increase of about 5%, pushing polyether costs up by approximately 400 RMB/ton.
- Propylene: Prices are consolidating weakly, providing less support for PO. However, PO plant operating rates remain limited, and the tight supply situation continues.

2. Profit Levels:
- Industry Average Gross Margin: Has dropped to 8–10%, a decrease of 2 percentage points from the previous month. Some small and medium-sized enterprises have suspended order acceptance due to raw material cost pressures.

IV. Relevant Policies and Events
1. Environmental Policies:
- Some polyether plants in the East China region have reduced production due to environmental inspections, leading to a temporary tightening of regional supply.
2. Trade Policies:
- Anti-Dumping Investigation: The EU's preliminary ruling on anti-dumping duties for Chinese polyether is expected to be announced in December, causing market concerns about potential export restrictions.
3. Industry Events:
- A large polyether enterprise plans to undergo maintenance in late November, which is expected to affect capacity by approximately 20,000 tons/month.

V. Analysis and Judgment
1. Short-Term Driving Factors:
- Cost Support: High PO prices maintain strong willingness among polyether plants to hold prices.
- Demand Resilience: Rigid procurement by downstream foam manufacturers supports prices, but price transmission to higher levels is hindered.
- Regional Supply and Demand: Low inventory in East and South China and ample supply in North China may widen regional price gaps.

2. Risk Points:
- Raw Material Price Decline: If PO prices soften, the cost support for polyether will weaken.
- Demand Falling Short of Expectations: Continued downturn in the real estate industry may drag down furniture foam demand.
- Changes in Export Policies: The EU's preliminary anti-dumping ruling may impact export orders.

VI. Price Forecast
1. Domestic Market:
- Short-Term (1–2 Weeks): Prices are likely to remain stable with an upward bias. The mainstream price in East China is expected to break through 13,000 RMB/ton.
- Medium-Term (1 Month): If PO prices retreat or downstream resistance to high prices intensifies, prices may fall back to 12,500–12,800 RMB/ton.
2. International Market:
- Southeast Asia: CFR prices may follow domestic increases, but the magnitude of the increase will be constrained by import costs.
- Europe and America: FOB prices are suppressed by weak demand and are unlikely to rebound in the short term.

VII. Operational Recommendations
1. Producers:
- Monitor PO price trends, reasonably control inventory, and avoid risks associated with raw material price fluctuations.
- Optimize production plans and prioritize high-margin orders.
2. Traders:
- In East and South China regions, consider moderate stock replenishment; in North China, focus on clearing existing inventory.
- Monitor progress on the EU anti-dumping investigation and plan export orders in advance.
3. Downstream Enterprises:
- Procure based on rigid demand, avoid chasing high prices, and appropriately increase the proportion of substitute materials.
- Negotiate long-term contracts with suppliers to lock in costs.