Overall, the short-term price fluctuations of propylene glycol are limited, and the market is expected to undergo a weak adjustment. It is necessary to pay more attention to changes in the supply and demand dynamics. After the National Day holiday, the domestic propylene glycol market is weak, with a reference price of 8200 yuan/ton on October 11th, a decrease of 266 yuan/ton or 3.15% compared to before the holiday.
Factors influencing the market:
Demand: Weak downstream demand, limited new orders
After the holiday, the propylene glycol market has a quiet trading atmosphere, with cautious downstream purchasing. Some industries, such as unsaturated resin and elastic polyether, have weak demand, and the buying sentiment is limited. There is a lack of effective support in the overall demand, leading some propylene glycol factories and suppliers to lower prices in order to sell their products. The market focus of propylene glycol is overall downward.
Supply: Loose supply, pressure on shipments
Before the holiday, the propylene glycol market was already quiet, with weak downstream stockpiling and pressure on factory inventories. The supply side has been loosened, and after the holiday, the overall supply in the propylene glycol market is ample. There is a wait-and-see mentality in the market.
Raw materials: Limited cost support
Before the holiday, the price of carbon dioxide, a raw material for propylene glycol, fell significantly, resulting in insufficient support for propylene glycol. After the holiday, the price of carbon dioxide remained at a low level, and the cost support for propylene glycol remained weak. Additionally, the market for epoxy propane, another raw material, has been weak, further limiting the cost support for propylene glycol. Therefore, the loosening of cost support will widen the downward space for propylene glycol.
Related products: Dimethyl carbonate market had a slight decline, increasing the cost pressure on propylene glycol
After the holiday, the market for dimethyl carbonate, a byproduct of propylene glycol, also had a slight decline. Both products were affected by the downtrend, thereby increasing the cost pressure for companies and narrowing the overall profit margin.
Market analysis:
Supply-wise, downstream stockpiling before the holiday was generally moderate. Currently, the overall supply of propylene glycol in the domestic market is sufficient. Although there are plans for maintenance of some propylene glycol facilities in Shandong province for about half a month, it is expected that facilities in Shaanxi province will resume operation in mid-October, so the overall change in propylene glycol production is not significant.
In terms of raw materials, the market for epoxy propane is relatively weak, providing only moderate cost support for propylene glycol. However, due to limited profit margin, the downward space for propylene glycol prices is expected to be limited.
In terms of exports, export orders still provide some support to the market, driving the sentiment of industry players.