In the first half of September, the domestic propylene glycol market showed a trend of “first suppression, then rebound, and rapid rise”, with a significant shift in price focus compared to the end of August. However, the dominant logic of the market is not demand recovery, but strong transmission from the raw material side. As of September 14th, the average production price of propylene glycol in Shandong Province was 10766 yuan/ton, an increase of 14.13% from the beginning of the month.
Core driving factors
Cost side: High level support from epoxy propane, but weakened marginal support
The cost of propylene glycol is highly linked to epoxy propane (PO). In early September, the strong operation of epichlorohydrin provided cost support for propylene glycol and was an important driving force behind this round of price increases; However, the market expects epoxy propane to strengthen in the first half of the year and gradually weaken in the second half, and the cost support will be marginally loosened, making it difficult for the cost side to continue driving propylene glycol to further increase significantly. The fluctuation of propylene raw materials is limited, the bottom line of costs is still in place, and the short-term space for deep decline is limited.
Supply side: Short term maintenance disturbance, suppressed expected increase in production resumption
The early maintenance of the equipment resulted in a tight supply of spot goods, causing strong price support sentiment among holders and driving up prices; But in the latter half of the year, some devices were restarted one after another, and market supply expectations increased, suppressing some upward space.
On the demand side: Jinjiu’s expected fulfillment is insufficient, with a focus on urgent needs and conservative stocking
Although it has entered the traditional peak season of September, downstream order recovery is weak, and the increase in production is limited. The resin and coating industries maintain on-demand demand, while the antifreeze industry is still in the off-season. The overall demand increment is limited, which restricts the comprehensive and significant rise of the market.
Market forecast:
Short term: With the gradual resumption of maintenance equipment in the early stage, the supply of goods is gradually released, and the expectation of loose supply is realized. On the premise that there is no obvious outbreak of demand, the price is under pressure and falls, oscillating downwards. If epoxy propane unexpectedly continues to strengthen and production is delayed, the high-level oscillation time will be prolonged, but it will be difficult to continue to rise significantly.

This week, the epoxy chloropropane market continued its upward trend. As of September 11th, the benchmark price of epichlorohydrin was 11600 yuan/ton, an increase of 3.57% compared to the beginning of this month. The price center of gravity continues to shift upwards, but downstream resistance to high prices is heating up simultaneously, and the market presents a pattern of “pushing up and playing games”.
Price influencing factors:
Raw material end: cost support rigidity enhancement. In terms of propylene, the resonance between crude oil and propylene has driven up prices, providing strong cost support. The tense geopolitical situation has pushed up the prices of crude oil and propane, coupled with a reduction in external sales of some major PDH companies, and the cost side support for propylene continues to strengthen. In terms of glycerol, although there are signs of weakening in external prices, prices remain firm in the context of tight domestic supply. Under the situation of dual raw materials rising simultaneously, the cost support of epichlorohydrin is relatively rigid. As of September 11th, the benchmark price of propylene is 10034.33 yuan/ton, an increase of 11.77% compared to the beginning of this month (8977.67 yuan/ton).
Supply side: Construction has rebounded but the increase is limited. This week, the average weekly production capacity utilization rate of epichlorohydrin in China was 45.34%, a decrease of 0.55 percentage points from last week. The overall supply has decreased compared to last week. The industry’s operating rate is still at a low level, and there is no obvious pressure on the supply side, which forms a certain bottom support for prices.
Demand side: Urgent follow-up, cautious pursuit of high prices. The downstream epoxy resin market has been passively pushed up by raw material costs, but there is insufficient follow-up from the demand side, resulting in severe losses for factories, which mainly rely on executing previous orders. The operating rate of solid epoxy resin decreased by 2 percentage points to 40% compared to last week, and the operating rate of liquid epoxy resin also slightly fell to 50%. The downstream has limited acceptance of high priced raw materials, and the procurement maintains a rhythm of small order demand, resulting in a weak market trading atmosphere.
Market forecast: Analysts believe that there will be strong short-term fluctuations and focus on stocking pace. At present, there is still upward momentum on the cost side, and there is no significant pressure on the overall supply side. Coupled with the gradual release of downstream enterprise stocking demand before the National Day holiday, multiple favorable factors are resonating, and it is expected that the short-term epoxy chloropropane market will continue to maintain a strong operation. However, it should be noted that the profit loss of the glycerol process has expanded to 1043 yuan/ton, and the profit of the propylene process has also shrunk, highlighting the contradiction in profit distribution in the industrial chain. If downstream resistance to high priced raw materials further intensifies, the upward space for prices may be constrained. It is expected that the market will mainly experience strong fluctuations next week, with a focus on the actual release rhythm of National Day stocking.

In September, the hydrogen peroxide market fluctuated and rose, with an increase of nearly 5%. At the beginning of the month, the average market price of hydrogen peroxide was 623 yuan/ton. On September 10th, the average market price of hydrogen peroxide was 653 yuan/ton, an increase of 4.81%.
Reasons for the fluctuation of hydrogen peroxide market
Supply side: The overall operating rate of the industry is moderate, with maintenance equipment being restarted one after another in the early stages. There are not many new shutdowns, and the total supply has rebounded compared to August. However, there is significant regional differentiation: Shandong has concentrated production capacity and sufficient supply of goods; Due to maintenance and logistics factors in the Southwest and South China regions, the supply of goods is relatively tight. Raw materials: Hydrogen and anthraquinone systems have average cost support, and this round of market trend mainly depends on supply and demand, with cost not the dominant factor. Storage and transportation characteristics: Hydrogen peroxide should not be stored for a long time, and manufacturers dare not stockpile in large quantities. The inventory generally maintains low turnover, and the inventory elasticity is very small. Once downstream centralized replenishment occurs, the quotation is prone to rapid increase.
On the demand side, as we enter the traditional peak season of September, the bleaching procurement of paper mills has rebounded compared to August, making it the most significant increase in September; Lithium iron phosphate: Some iron phosphate enterprises have increased their production capacity, leading to an increase in demand for oxidants; After the autumn maintenance of municipal and sewage treatment plants, they will resume operation. The production of caprolactam and epichlorohydrin is still weak, and the incremental procurement of large factories is limited; The demand for printing and dyeing textiles is flat, mostly for immediate use and procurement, without stocking up in advance; Downstream enterprises are generally cautious, mainly focusing on essential procurement, with weak willingness to lock up orders and stockpile goods on a large scale.
In summary, in mid September, domestic hydrogen peroxide supply pressure remained, rigid demand increased, and the market will continue to fluctuate and rise in the future. From a technical perspective, it can be seen that the hydrogen peroxide market was at a high level in early September, and there is still room for further decline in the future. In mid September, the hydrogen peroxide industry will continue to fluctuate and rise, with prices expected to be between 650 yuan/ton and 700 yuan/ton.

In early September, the domestic ABS market showed a positive trend, with most grades experiencing an increase in spot prices. As of September 9th, the average price of ABS sample products was 11233.33 yuan/ton, an increase of 4.66% from the beginning of the month.
Fundamental analysis
Supply level: As we enter September, the domestic ABS industry’s equipment load remains stable with small fluctuations, and the overall operating rate within the range is around 57%. The current weekly average production is within 130000 tons. The inventory position of finished products is still acceptable and has been reduced to less than 180000 tons. The shipment situation of aggregation plants within the range is average, with poor profitability. There is still an expectation of contraction in the short term after the supply market. Overall, the ABS supply side’s support for spot prices in early September is still acceptable.
Cost factor: The situation in the Middle East fluctuated in early September, making it difficult to implement a ceasefire agreement. The shipping risk in the Strait of Hormuz is relatively high, and there is concern in the market about international crude oil supply, with geopolitical premiums continuing to rise. Driving the prices of pure benzene and styrene to rise synchronously, while exports remain positive, it is expected that the market may maintain a strong pattern,
Although the acrylonitrile market is supported by the rise in crude oil prices, the combination of high operating rates and low consumption is suppressing spot prices. In the early stage, Zhejiang Petrochemical’s 660000 tons and Sino British Petrochemical’s 130000 tons of new equipment and production capacity will be successively implemented, and the current oversupply is looming over the acrylonitrile market. At the beginning of the month, after a stalemate and consolidation, the market fell and quickly turned downwards. At the same time, the demand is sluggish, and the future price of acrylonitrile is prone to decline but difficult to rise.
In early September, the cost sentiment support for butadiene combined with the tightening of spot circulation in the market has heated up the bullish atmosphere, and prices continue to rise; But as raw material prices rise, downstream capacity continues to weaken, and resistance to high priced goods gradually increases. At the end of the decade, negative feedback from downstream markets emerged, and the market’s willingness to chase higher prices cooled down, leading to a high-level consolidation of the market. Suggestions for future market trends include paying attention to the rebalancing of upstream and downstream profits, as well as the fulfillment of traditional demand during peak seasons.
In terms of demand, there will be limited changes in the start of ABS downstream enterprises in early September. The profitability of the main terminal electrical industry has not improved, and the buyer camp’s sentiment has returned to resistance to high priced sources, with a tendency to take goods as needed. The willingness to chase price increases on the market is average, and merchants follow the market and withdraw funds. Overall, there was a slight shortage of demand in early September, and there was no clear signal of the traditional off-season starting.
Future forecast
The domestic ABS market rose in early September. The cost of the three materials within the range fluctuated, and the production load of the aggregation plant changed narrowly. The inventory is low, but the on-site supply still maintains a sufficient range. Since the beginning of the month, ABS consumption has been average, and the unit price profit situation has not improved. The current market trend is focused on remote cost values, and it is recommended to closely monitor the signals of crude oil and traditional peak season activation in the future.

Recently, the price of ethylene glycol has been high, and the operating rate of domestic facilities has increased. Under the increase in supply, the ethylene glycol market has fluctuated at a high level and adjusted weakly. On September 8th, mainstream spot prices in East China closed at 9750 yuan/ton,+15 yuan/ton; The spot price in South China closed at 9350 yuan/ton, -10 yuan/ton.
Supply side: Imports are unknown due to the situation in the Middle East and passage through the strait; Negotiations on the expected resumption of supply for Taiwan’s facilities in September; Domestic equipment increased its load due to improved efficiency and was sold to the market, resulting in an overall increase in supply in September. According to statistics, as of September 7th, the inventory of diethylene glycol ports in East China was 3300 tons, a decrease of 1000 tons from the previous cycle. This cycle (September 8-14), Zhangjiagang Diethylene Glycol plans to ship 3130 tons, including South Asian cargo and ocean freight; There are no domestic products this week.
Demand side: Polyester load continues to weaken, dropping to around 75%; UPR construction is hovering around 30%, pay attention to the follow-up of terminal replenishment. According to statistics, as of September 3rd, the average weekly operating rate of unsaturated resin factories in China was 32.5%, and the overall capacity utilization rate decreased compared to the previous cycle. In terms of dock shipments, from August 31st to September 6th, the total amount of shipments from the main ports in East China, Changjiang International and Fubao Warehouse, was 1346 tons, with an average daily shipment of about 192 tons; On September 7th, a total of 66 tons were shipped from the two storage areas in Zhangjiagang, a decrease of 126 tons compared to last Sunday’s average shipment.
Cost wise: The instability of the US Iran situation continues, supply risk concerns remain difficult to eliminate, and international oil prices have risen.
Market expectation: In the short term, the situation between the US and Iran has reversed, and crude oil has driven EG to be stronger. However, with the backdrop of negative domestic equipment (including Taiwan), supply expectations are gradually easing, and short-term prices are shifting from macro expectations to fundamentals. The market is mainly focused on reducing holdings and premiums, and price expectations are adjusted weakly.