China’s Polyol market contradicting the Global price trend

The Polyol prices were surging globally, except in China, where the trend was opposite from the rest. Polyol showcased a growing pricing trend in the USA, Germany, and India in the past few weeks, while it was declining in China. This discrepancy in Polyol prices in the Chinese domestic market has put up a big question mark that needs an answer.

Though Polyols have different categories, such as Polyether, Polyester, Polybutadiene, Polycarbonate, and Polyacrylate Polyols, only Polyether and Polyester Polyols are majorly discussed for their advanced properties. Polyols primarily find their usage in Polyurethane based industries and the manufacturing of several commodities such as sealants, adhesives, foams, elastomers, etc. The production of Polyol requires Ethylene Oxide and Propylene Oxide as the upstream, so the fluctuation in prices of these commodities affects the market value of Polyol.

The North American market witnessed an upward trajectory in the prices of Polyol owing to the strong downstream demand. As the consumption of Polyurethane escalated in the automotive, construction, and infrastructural industries, so are the demand for Polyol. Besides, the prices of feedstock Propylene Oxide have also been soaring, which consequently led to the price hike of Polyol in the domestic market. Furthermore, elevated crude oil prices, heightened freight charges, cargoes, labour shortages, and congested ports amidst Russia-Ukraine war tensions propelled the prices of Polyol. Conclusively, In the USA, the prices of Polyether Polyol (Mw 3000 & µ 400-650) assembled at USD 4617/MT FOB Texas in the week ending with April 22.

Likewise, the Polyol prices were fuelling in the Indian domestic market due to the increased offtake of Polyurethane for the flourishing construction and automotive sector in the country. Meanwhile, augmented upstream costs and transportation costs also contributed readily to the price rise of Polyol. Hence, In India, the assessed price value of Polyester Polyol (Mw 2000 & µ 550) was USD 2405.1/MT Ex-Mumbai during March. Germany mimicked the trend of Polyol in the USA and India because of similar reasons. The evaluated prices of Polyether Polyol (Mw 3500 & µ 400-650) in the German market were USD 3945/MT in March.

However, due to the restricted market activity in China because of another covid-19 outbreak, the demand from Polyurethane related industries significantly dropped, which led to the declined price value of Polyol in the domestic market. In addition, the prices of feedstock propylene oxide were also stagnant in the China Market, which supported the price fall of Polyol. Thus, Polyether Polyol (Mw 5000) prices in China settled at USD 2010/MT FOB Qingdao during the week, concluding on April 22. According to ChemAnalayst, “The pricing trend of Polyol in China would most likely to remain opposite from the rest of the world in the upcoming weeks owing to uncertain market scenarios.”