Limited domestic capacity or will support the continued rise in propylene oxide prices

Recently, the domestic propylene oxide price has dropped. According to relevant data, the current domestic propylene oxide price has dropped to around 14,000 yuan/ton. Previously, the domestic price of propylene oxide rose from the beginning of the 1.3 million yuan / ton to a high of 17,000 yuan / ton.

Chang Yuzhi, a research fellow in the chemical industry of China Investment Advisors, pointed out that the recent drop in the domestic propylene oxide price is mainly due to the weak demand in the downstream market. At present, the macroeconomic development situation is not optimistic. The demand for polyether downstream industries is relatively low, which makes the market conditions of polyether products poor, and their prices are difficult to increase, making the profitability of polyether enterprises limited. Therefore, it is difficult for the downstream demand market to support the continued rise of propylene oxide prices.

Moreover, due to the recent intensification of debt crisis in Europe and the United States, people’s concerns about the prospects for global economic development have increased, and the prices of international bulk petrochemical products are in a state of shock. At present, the price of major petrochemical products has not risen further, and prices of some petrochemical products have also fallen. This will also make the price of propylene oxide lower.

Chang Yuzhi also pointed out that although the market price of propylene oxide has fallen, but due to the lack of domestic propylene oxide production capacity, there is still a certain supply and demand gap in China's propylene oxide market. And in the last two years, the growth rate of domestic polyether production capacity will be higher than that of propylene oxide; plus Shanghai Gaoqiao Petrochemical's 80,000-ton/year propylene oxide unit will be permanently suspended, and the market of propylene oxide in China will also be in the future. There will be a situation where demand exceeds supply. It is expected that the domestic propylene oxide price will continue to remain high in the later period.

The "Investment Analysis and Forecast Report of China's Basic Organic Chemicals Industry in 2011-2015" published by the China Investment Advisor shows that propylene oxide is one of the important derivatives of propylene and is mainly used for the production of polyether polyols, propylene glycol, and propylene carbonate. Ester, alcohol ether and other products have been widely used in chemical, light industry, medicine, food, textile and other industries. At present, China's consumption of propylene oxide (PO) is mainly based on the production of polyether polyols, accounting for about 85% of the total consumption, followed by propylene glycol, accounting for about 8%, propylene carbonate and alcohol ethers each account for about 2%. Others account for about 3%.