Propylene Oxide Price Trend and Forecast

Regional Price Overview

Get the latest insights on price movement and trend analysis of Propylene Oxide in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

For the Second Quarter of 2022

Asia

In June 2022, the price for propylene oxide fell in the Chinese market as the price of feedstock propylene weakened. The demand from downstream industries as well as in the regional market was low along with flat shipments which in turn supported the low prices. In the second week of June, the average propylene oxide prices were assessed at around 11,033 RMB/MT dropping by almost 4.34% since May 2022.

For the First Quarter of 2022

Asia

The average enterprise price of propylene oxide was 11,800.00 RMB/MT on February 10, up 6.31% from January 10, and up 28.19% in a three-month cycle. The price of propylene oxide on the market increased in the second week of February.

The price of the raw material propylene had been pretty robust in Q1 of 2022, and the cost side had some support. Some firms were running at a low capacity, and supply was scarce. The downstream on-demand follow-up scenario was adequate. The mainstream propylene oxide quote in Shandong's propylene oxide market on the 10th was approximately 11,500-11,600 RMB/MT.

For the Fourth Quarter of 2021

Asia

The cascading impact of the surge in crude oil prices on global supply constraints caused propylene and other oil equivalents to gain value in price trends, driving up propylene oxide prices in Asia in October and November. The polyurethane industry's market for propylene oxide remained robust throughout the quarter.

With spot activity picking up pace following a brief respite in the global port container crisis in December, the prompt delivery of import supplies forced traders in India to make downward revisions to PO contracts, which were hovering around 2934 USD/MT Ex-Mumbai. Meanwhile, the Japanese market saw a fall in propylene oxide prices throughout December, following record highs in November, but the percentage decline was not big enough due to constant costs of implementing in the polyurethane sectors.

Europe

The European market faced the brunt of crude oil supply limits and spiking energy prices, which combined to create manufacturing constraints for PO resulting in considerable price increases all through the 4th quarter of 2021. The relentless rise in upward cost pressures combined with the rising demands for PO in the polyol industry compelled producers to make regular upward price revisions to generate significant netbacks. Germany propylene oxide prices, which settled around 3595 USD/MT FOB Hamburg in December, suggested low domestic inventories in the face of increased export activity.

North America

In North America, the PO market entered the final quarter of 2021 with favorable feelings. Propylene oxide prices continued to rise steadily throughout October and a large portion of November, owing to the jump in propylene input cost.

Influenced by the region's crude oil supply deficit, mostly as a result of reduced refinery operations due to ongoing repairs at Louisiana facilities following landfall by Hurricane Ida, the flow of propylene feed remained scarce in the region's PO facilities. However, prices in the United States remained stable in December, settling at 3465 USD/MT FOB Louisiana, owing to a decline in propylene prices and increased offtakes in global various end-use industries following supply chain renovation.

For First, Second and Third Quarters of 2021

Asia

PO supply was raised in the first quarter of 2021 to coincide with the completion of turnarounds at several large plants in the northeast Asian region. Additionally, the advent of new manufacturing facilities in China increased overall supply in the Asia-Pacific.

However, because of the Chinese Lunar New Year vacations, the PO market in China stayed subdued, resulting in uneven demand results. Consumption of propylene glycols and polyols increased in the second part of Q1, generating an increase in overall market pricing.

Supply in the Asia Pacific region was sufficient to meet the demand of end-use sectors, however, it varied significantly in several major markets around the region. In China, because of rising inflation rates, the costs of the crucial feedstock propylene remained stable for the majority of Q2, adding to buyer resistance. In June, the FOB Qingdao PO debate was resolved at 1981 USD/MT. In Southeast Asia, the second COVID wave wreaked havoc on downstream markets, reducing demand.

Propylene oxide prices increased considerably in the Asia Pacific region in the third quarter. Propylene prices in the upstream sector were stable in Q3 due to rising inflation rates in China's domestic market. Producers in China received continuous orders from downstream polyether polyol producers, resulting in the price increase. Global shortages of the chemical had a spillover impact on the Indian economy, resulting in a sharp increase in its pricing. The price CFR JNPT (India) was last resolved at 2555 USD/MT in September.

Europe

PO availability in the European region was constrained during the first quarter as a result of reduced feedstock production from refineries in response to increased pandemic cases and new lockout limitations. The situation deteriorated further as imports from Asia were hampered by the Chinese Lunar New Year, compounded by the disruption caused by harsh weather conditions in the United States. However, demand from the regional polyol maker remained strong throughout the quarter.

In the European continent, the overall forecast for the PO market continued to improve in Q3 of 2021. Across the region, supply circumstances improved. Due to a shortage of upstream propylene required to manufacture propylene oxide in Q3 2021, its price increased. The construction sector continued to be a strong buyer of PO derivatives throughout the quarter. Propylene Glycol demand remained robust in this quarter as well, owing to the cosmetics and pharmaceutical industries.

North America

Supplies of PO remained scarce in Q1 2021, as major US propylene factories were shut down for planned maintenance in the first half of the year. The tight supply scenario was exacerbated further when many propylene manufacturers stayed down due to serious freezing weather in the Gulf of Mexico region of the United States.

However, increased consumption in the downstream polyols and polyurethanes sectors boosted regional demand. Due to rising demand and supply constraints, regional propylene oxide prices more than doubled in March settlements, reaching 2600 USD/MT in mid-March.

As the US chemical industry recovered from the devastation caused by winter storm Uri, improved operations at refineries and PDH units contributed to an improvement in propylene oxide supplies in North America compared to the last quarter. Improved availability, on the other hand, did not affect regional pricing, which continued to rise throughout the quarter.

FOB Louisiana (USA) negotiations concluded in June at 2581 USD/MT, an increase of 356 USD/MT above March levels. The supply-demand situation remained uneven in the second quarter, as seasonal offtakes from downstream polyol makers increased to meet growing building demand. Demand was bolstered further by increased polyol and propylene glycol shipments.

Propylene oxide prices increased in the domestic market in the North American region in Q3 2021. The combination of rising propylene prices and a scarcity of PO inventories resulted in a tightening of the material's supply fundamentals. A similar pattern was observed globally, as PO supply had been severely curtailed since the start of the year. The scarcity of raw materials and the rising production costs have had a twofold effect on the region's production rates.

Additionally, the supply chain was harmed throughout the quarter by limited logistical availability in the region. PO demand was robust in the third quarter, as downstream isocyanates continued to draw higher volumes in response to the demands for polyurethanes in the US marketplace. As a result, propylene oxide prices increased throughout Q3. The worldwide PO market experienced a scarcity as a result of unanticipated turnarounds by large producers such as Dow Chemicals in the aftermath of Hurricane Ida.

Latin America

Increased demand for hygiene-related items and disposable goods as a result of the pandemic resulted in increased polyethylene and polypropylene demand in South America in 2021. PP imports increased to $226 million in November 2021, up from $203 million in January 2020. The demand and supply balance of propylene oxide was fairly balanced during the year, thanks to imports.

For the Year 2020

Asia

As a result of scheduled maintenance and future turnarounds at many manufacturing plants, propylene oxide (PO) spot and contractual sales were regulated by manufacturers in light of the staggering decrease in net supplies. Durable demand for polyols also prompted some integrated PO manufacturers to shift their focus to polyol production instead of simply selling propylene oxide.

As China's furniture and home furnishing sector entered the peak demand season in September following a 16.4% increase in July, demand for polyols increased. Supply constraints increased as numerous PO factories in Shandong faced unexpected environmental inspections, forcing them to cut production rates.

Due to the scheduled maintenance shutdown of Nanjing Hongbaoli's hydrogen-peroxide-propylene oxide plant in late August, the overall operating rate of PO plants in China decreased significantly to 77% by the quarter's conclusion. Spot propylene oxide prices in China, which had been hovering around 2350 USD/MT, had risen to 2400 USD/MT by September end.

Europe

With a noticeable uptick in downstream demand, domestic manufacturers increased their operational rates in the third quarter. Global supply constraints had a direct impact on the market dynamics of the chemical in Europe, resulting in low inventory levels despite strong demand for downstream polyols.

North America

The strong recovery in polyol demand boosted PO market sentiments in North America. A sudden mismatch in supply and demand caused by constrained production and an unexpected resurgence in downstream demand increased the market's shortfall for its derivatives. Propylene oxide prices in the region quickly increased in September, following the sharp slant in demand trends. With numerous production facilities on the Gulf coast declared inoperable due to Hurricane Laura fears, the region's total supply tightened, resulting in a significant rise in its average price for the quarter.

Latin America

South America began its fourth quarter of 2020 with a positive outlook on the polymer market. During the first half of 2020, the region was one of the hardest hit, but it recovered quickly in the second half. The automobile sector in South America increased polypropylene usage in the third quarter. Vehicle production levels in Brazil and Argentina improved since May and stabilized in August. In April, the industry was almost completely shut down due to the coronavirus outbreak.

Procurement Resource provides latest prices of Propylene Oxide. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.