On September 21, the market price of propylene oxide in Shandong area ranged from 16,900 yuan to 17,500 yuan (ton price, the same below), rising from September 1 to 3,400 yuan to 3,900 yuan, setting a new high since July 2008.
"At present, the propylene oxide market supply is tight, polyether polyol, dimethyl carbonate and other downstream goods are difficult to actively pursue the rise, coupled with the strong support of raw propylene propylene, it is expected that the short-term propylene oxide market will remain high." Shanghai consulting company propylene oxide expert Li Harvard analysis said.
The supply is rather tight
According to Zhuochuang Information epoxy propane analyst Xue Li, in the first quarter, affected by the epidemic, propylene oxide inventories accumulated; With the outbreak under control in the second quarter, domestic demand began to pick up, and propylene oxide high stocks gradually digested. Since then, propylene oxide was in low demand in June and July, and many parties did not dare to take the risk of inventory. In the case of low inventory, with the arrival of the peak demand season, especially the "Gold nine" demand, propylene oxide prices continue to hit new highs.
"In October, the propylene oxide industry will come back for intensive maintenance, and the market will be more bullish." Xue li said.
In terms of supply, the effective capacity of propylene oxide in China was 3.82 million tons as of August 2020. In terms of production time, by the end of 2020, 880,000 tons of new production capacity will be released, including blue Planet Environmental Protection 400,000 tons/year HPPO method, Guei Petrochemical 200,000 tons/year HPPO method, Zhonghua Quanzhou 200,000 tons/year PO/SM method, and Citic Guoan 80,000 tons/year PO/SM method devices, etc.
"However, due to the long construction cycle and high technical barriers, the production plan of the projects under construction will be delayed during the year. It is estimated that the annual effective capacity will remain at about 3.28 million tons. The domestic propylene oxide market is expected to maintain a tight balance in the short to medium term with the withdrawal of small and medium-sized chlor-alkali companies and strong demand for downstream polyurethane and dimethyl carbonate. Harvard Lee analysis said.
Downstream actively follow up
The downstream polyether of epoxy propane is mainly used in the production of furniture, home appliances, automobiles, building insulation materials, etc.
"In May, the United States imposed a high anti-dumping duty on mattresses exported from Southeast Asia, which will be implemented on October 22. To avoid high anti-dumping duties, some Southeast Asian factories delivered orders early and overseas demand increased, which boosted the export market during this period. May to June, polyether prices pushed up steadily; July to August, the polyether market rally as the rainbow. As of September 21, the price of soft foam polyether in east China market rose to 19,000 ~ 20,000 yuan, up 3,000 ~ 3,500 yuan from September 1. Xue li said that in the later period, the National Day holiday is coming. Although the current high stocking market is not obvious for the moment, due to the low level of social inventory in the upstream and downstream, the cyclical procurement of steel still needs to be kept in the downstream. In addition, there are still some equipment maintenance plans after the holiday, and the high level of propylene epoxide market in October can still be expected under the temporary difficulty in supply easing.
Another major downstream dimethyl carbonate is used in polycarbonate, electrolyte and other fields. According to Li Haofu, under the guidance of domestic new energy strategy, lithium battery and electrolyte industry has been greatly developed. In September, driven by strong demand for electrolyte, dimethyl carbonate price entered the "straight line pull up" mode. On September 21, shandong dimethyl carbonate market quoted 12,500 yuan, up 7,700 yuan from the lowest point of the year, up as much as 160.4%.
"In the medium and long term, 50,000 tons/year of Huian of Shanxi Zhongke and 200,000 tons/year of Dimethyl carbonate of Zhejiang Petrochemical will be released, which may further increase the demand for propylene oxide and help keep the market at a high level." Harvard Lee analysis said.
Cost support remains
"Although propylene price center of gravity has fallen back, but not as much as crude oil, it still has the cost support for downstream propylene. At present, the domestic propylene market is running stably, with imports arriving in Hong Kong one after another, downstream manufacturers just need to enter the market to replenish inventories, and the demand for pre-holiday stocking is driving the overall market trading atmosphere. On September 21, propylene prices in Shandong rose to the highest level of 7,450 yuan this year, up 550 yuan from September, which is a strong support for propylene epoxy cost. Zhuochuang information propylene analyst Han Yong said.
In the later period, the domestic propylene supply and demand surface changes quite a lot. On the supply side, the shenyang waxing CPP unit was restarted on September 22, and propylene output was gradually restored. Jilin Cornell MTO plant is scheduled to stop for maintenance for about 20 days at the end of September. The 200,000-ton/year MTP plant of Daze and 100,000-ton/year MTP plant of Huabin Chemical are scheduled to restart in October; The Wanhua chemical propane cracking unit is scheduled to start up in October.
Downstream, liulian acetone phenol phase II plant is scheduled to be put into production in the fourth quarter; The 200,000-ton/year PP unit of Dongming Petrochemical is scheduled to be put into operation at the end of November; The 150,000-ton/year PP unit of HSBC Petrochemical company is scheduled to be put into operation in November to December. Two 400,000-ton/year PP units of Donghua Energy (Ningbo) Phase II will be launched in mid-October.
"On the whole, the domestic propylene supply will continue to be tight in October, and the market may lag behind and rise first. Supported by the positive supply side, there is room for the mid-term and long-term propylene market to rise, and the high price is expected to hit 8,000 yuan, bringing cost support to the propylene oxide market." Analysis by Han Yong.
