Polyether Polyol Market Comes to a Deadlock as PO Price Keeps Moving Up
PUWORLD (2013-12-20)—Domestic polyether polyol market entered weak season in quarter four. The market is under cost pressure as raw material propylene oxide price keeps moving up, however, facing weak downstream demand, PPG insiders choose to offer a stable quotations. But once there are large increases in raw material PO, PPG manufacturers will have to lift price accordingly to ease cost pressure. Downstream buyers are cautious in placing orders. Most of them buy goods according to demands.
What are the reasons for continuous increase in raw material PO? Analyst in PUWORLD lists three:
1. There isn’t enough PO capacity in China. Many capacities that were planned to be released this year have been put off. For example, 80 ktpa PO unit of Shandong Sanyue and 300 ktpa PO unit of Jilin Shenhua failed to start operation this year.
2. There are less imports arrived. As there are some problems of PO unit in Saudi Arabia, imports volume decreased.
3. There are so many polyether polyol manufacturers, which have great demands for PO. Demand-over-supply condition helps to lift market price.
As to downstream industries, rigid polyether polyol systems market preformed weak. Cold chain industry arranges manufacturing according to demands. Winter is the traditional slack season for construction industry. Projects are all finished in north China while reduced in south China. Solar energy market is dragged down by other industries. Generally speaking, downstream markets present mediocre.
Propylene oxide price moved up again this Monday, PPG manufacturers were willing to follow this up, but in a small range in consideration of weak downstream. PPG manufacturers will be able to be more initiative if expansion of PO capacity goes smoothly.
By Sarah (firstname.lastname@example.org)