After the holiday, the domestic epoxy propane market showed a strong upward trend. As of October 10th, the benchmark price of epoxy propane was 11300 yuan/ton, an increase of 4.63% compared to the beginning of this month.
On the raw material side, propylene has risen strongly, with strong cost support. This week, the price of propylene in Shandong continued to rise to around 9977 yuan/ton, a month on month increase of 2.78%. Liquid chlorine also rose to 250 yuan/ton, providing strong support for epoxy propane on the cost side. As of October 9th, the benchmark price of propylene was 9977.67 yuan/ton, an increase of 2.78% compared to the beginning of this month (9707.67 yuan/ton).
Supply side: Production is steadily increasing, but mid month maintenance is expected to cause disturbances. The overall supply is mainly stable. In mid to late October, some units are expected to undergo maintenance, and the new production capacity project is scheduled to start in October, forming a game between supply increase and maintenance reduction.
On the demand side: follow up on urgent needs is the main focus, and the differentiation pattern continues. The landing of the 300000 ton/year expansion project of the polyether sector’s Innoway has brought about an increase in demand, but the inventory and maintenance arrangements of Wudi Xinyue, Binhua Phase I, and others have resulted in both increased and decreased consumption; The planned shutdown and maintenance of the Shandong Wells plant in the propylene glycol sector will result in a slight decrease in downstream chemical demand in October. Downstream resistance to high priced raw materials has become apparent, with new order follow-up mainly focused on small orders for essential needs and insufficient willingness to chase higher prices.
Comprehensive forecast: In the short term, with the high operation of propylene and the lack of supply side inventory pressure, there is still some upward space for the price of epoxy propane. But in the medium term, with the restoration of maintenance equipment and the gradual realization of new production capacity, the pressure on the supply side tends to increase, while the demand peak season is insufficient and downstream resistance to high prices is becoming stronger, limiting the further upward space of prices. It is expected that prices in Shandong region will fluctuate within the range of 9500-11300 yuan/ton in October. More attention should be paid to the pace of device restart and volume increase, as well as changes in downstream stocking intentions.
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