Strong price rise of propylene oxide in 2020

1、 Price trend of propylene oxide


(Figure: p-value curve of propylene oxide product)


According to the data of the business club, the average price of domestic propylene oxide enterprises was 10133.33 yuan / ton on January 1, 2020, and the average price of domestic propylene oxide enterprises was 18900 yuan / ton by December 31, 2020, with an increase of 86.51%. The lowest price was 7266.67 yuan / ton on April 7, and the highest price was 19300 yuan / ton on November 24, with the maximum amplitude of 165.60%.


According to the monthly rise and fall chart of propylene oxide from January to December in 2020, the overall price of propylene oxide showed a downward trend in the first quarter and October, and rose in other months. The biggest monthly rise was in September, with an overall rise of 37.56%, and the biggest monthly decline was in March, with an overall decline of 13.65%.


2、 Market analysis


Weak downward trend (January to March): in the first quarter, the price of raw propylene showed a downward trend as a whole, which weakened the support for the cost of propylene oxide. Under the influence of public health events, inter regional transportation restrictions and terminal enterprises resumed work slowly. In March, the market gradually recovered, but the downstream demand was weak, and propylene oxide fell by 23.03% in the first quarter as a whole.


The price of propylene oxide fell to the lowest level in the year (7266.67 yuan / ton) in early April. Then, driven by the sharp rise of propylene, the price rose sharply. The overall market fluctuated and rose in April. From May to June, the price trend of propylene oxide rose more or less. In July, with the large quantity of downstream polyether orders, the demand side steadily supported the price rise, and propylene oxide started to work in August In September, the market price of propylene oxide continued to rise, the factory had no accumulation, the downstream conduction was active, the volume price chase was steady, the main offer continued to push up, and the price of propylene oxide rose 143.10% from April to September.


Price downturn (October): in late October, Po supply increased in the short term, and the prices of mainstream manufacturers decreased, seeking to stabilize and go to the warehouse. However, the downstream risk aversion and wait-and-see sentiment were strong, the inventory accumulated slowly, the manufacturers gave up profits to ship, and the price downward channel opened.


Overall shock upward (November December): in November, prices rebounded after falling, demand supported the market, manufacturers had no pressure, prices continued to rise, hitting the year’s highest point (19300 yuan / ton). On the 25th, market news was long or short, mentality game, price depression in the middle and lower reaches remained unchanged, holding weak wait-and-see, and market negotiations declined. In December, most Po manufacturers in Shandong reduced their burden, the overall supply of the market was tight, the manufacturers had no pressure, and the inventory in the middle and lower reaches was low. They just needed to follow up and stabilize, supporting the continuous rise of prices.


Import and export: according to customs statistics, the cumulative import volume of propylene oxide in China from January to November 2020 is 428793.068 tons, and the cumulative export volume is 4106.151 tons.


3、 Future forecast:


To sum up, the price of propylene oxide will rise sharply in 2020, which is mainly supported by the relationship between supply and demand, as well as the impact of raw material prices in the first half of the year. Entering 2021, the current propylene oxide Market is relatively strong, manufacturers are still under no pressure, and the main middle and downstream procurement is stable. It is expected that the propylene oxide market will mainly operate at a high level in the short term, and more attention should be paid to market information guidance.