Propylene oxide (PO) prices remained under pressure globally due to excessive supply and weak demand in downstream industries. In Asia, PO market activities have slowed due to the holiday season, while procurement in both the European and U.S. markets remains limited as consumer sentiment dips and market uncertainty.
In China, PO market activities have paused due as the holiday season began in early October 2025. Early in September, PO prices saw a rise as manufacturers stocked up ahead of the holidays. However, by late September, as these stocking activities wrapped up, prices began to fall. This trend continued into early October, highlighting a lack of momentum in the market. The high inventory levels in China, stemming from pre-holiday stockpiling and steady production, added further pressure on prices.
Additionally, feedstock propylene prices have also been low, which has helped reduce production costs for propylene oxide and pushed manufacturers to lower their prices. Demand for products like polyols and polyurethanes remains weak, with purchasing activities cooling and exports limited.
This situation has led to increased domestic inventory levels, applying more downward pressure on prices.
Additionally, India has introduced antidumping duties (ADD) on copolymer polyols. This decision aims to support local manufacturing and decrease reliance on Chinese imports. With imports from China surging by 287%, Indian manufacturers have been forced to lower their prices unsustainably. The new ADD is expected to reduce polyol production in China, consequently decreasing the demand for propylene oxide.
In Europe, PO prices have also seen a decline during the early October. Low demand from the downstream polyether polyol sector has been a significant factor. The polyether polyols market has struggled due to excess production capacity and rising imports, particularly from Asia.
Key sectors like automotive and household appliances have felt the pinch from reduced consumer confidence and spending. The construction sector has also faltered amid economic uncertainty and a weak investment environment.
As a result of these challenges, a U.S. chemical company announced plans to shut down its polyols plants in Belgium by March 2026, primarily due to low demand and soaring energy costs that are three times higher than in the U.S.
In the U.S. market, PO prices are under pressure, with insufficient downstream demand and high inventories keeping prices stable at low levels. The low feedstock propylene prices have further reduced production costs. As per the EIA weekly report, during the week ending 26th September 2025, Propane/propylene inventories increased by 3.5 million barrels from last week.
Looking ahead, data from ChemAnalyst suggests that PO prices are likely to stay low globally in the last quarter of 2025 due to excess supply and tepid demand. Rapid PO capacity expansion, particularly in China, may continue to weigh PO on prices. In Europe, competitive pricing from Asian exporters with surplus capacity is expected to maintain this downward trend, while U.S. buyers are adopting cautious inventory strategies as winter approaches.
