Good cost drives propylene glycol market to stop falling and increase

First, the rising price of raw materials industry profitability reduced

As shown in the figure above, since 2024, the combined profit of PO transesterification propylene glycol and dimethyl carbonate has been below the cost line for a long time. Recently, with the rise in the market price of propylene oxide, the comprehensive gross profit level of propylene glycol and dimethyl carbonate by PO transesterification continues to decline. This week, the domestic PO transesterification method propylene glycol and dimethyl carbonate combined gross profit has dropped to -373.22 yuan/ton, down 28.79% from last week. The price trend of raw material cyclopropyl is upward, the cost side support is enhanced, the price of co-production dimethyl ester is stable and weak, the comprehensive profit level continues to deteriorate compared with the previous period, the short-term propylene oxide price is stable and expected to rise due to the supply contraction, and the enterprise is running well under the cost pressure.

Second, the local storage and stop inspection plan to support the price is strong

Recently, the domestic propylene glycol equipment has been restored to full load operation, and the market circulation supply is sufficient. According to Longzhong statistics, the industry capacity utilization rate this week was 65.82%, an increase of 3.27 percentage points from the previous week. In terms of factory equipment this week, Zhejiang Tie Wind from July 18 to resume full load operation, Qingdao alkali plant Nissan increase, Zhuohang a set of 14 days after the restoration of full load, driving the industry to start to improve, the plant is running smoothly next week, so it is expected that the next cycle of market capacity utilization or fluctuation is not big.

Third, downstream start low shock on demand bargain purchasing

From the comparison of domestic propylene glycol and downstream capacity utilization rate, propylene glycol capacity utilization rate is relatively high compared with the downstream unsaturated resin and polyether industry. The downstream industry is generally active, of which the capacity utilization rate of the main downstream unsaturated resin industry is about 36%, the summer high temperature weather factory load is not high, the Tianjin plant parking, Zhangzhou Xinyang, Feiyuan and other equipment decline within the week, resulting in a reduction in production. The capacity utilization rate of the second largest downstream polyether polyol industry decreased slightly, and the average capacity utilization rate of the polyether industry in this cycle was 58%, down 1 percentage point from the previous cycle. In the traditional off-season of demand, the downstream construction is not high, leading to the improvement of domestic trade demand is not obvious, and the downstream maintains the rhythm of just-needed procurement, but as the market turns, appropriate stock procurement is carried out within the week.

Fourth, wait-and-see mainly follow the fluctuation of raw materials

Looking forward to the future market, in terms of supply, the supply of goods is still sufficient, basically there is inventory to be digested, but considering the market share is still high, in addition to the long-term do not start most of the production of enterprises to maintain full load operation, in addition to Hunan Zhongchuang part of the device has begun to operate, the product has not yet been put into production, but the market has a certain negative pressure. In addition, some enterprises have maintenance technical reform plans at the end of July and August, and there are optimistic expectations for the market, so the current shipment pressure is basically controllable. In terms of market demand, it is difficult for the trade market to improve greatly in the short term, and foreign trade orders have declined with sea freight and demand from Russia has increased or is expected to improve. The price of raw material cyclopropylene is stable and rising, the cost support is still there, and the market is empty and intertwined. It is expected that the short-term market price of propylene glycol or the dilemma of rising and falling is mostly stable, and the dynamics of raw materials and devices are concerned.