During late October 2025, propylene oxide (PO) prices in Asia remained under pressure following the holiday period in major Asian economies such as China and India. Similarly, the European market experienced the same trend.
In China, PO prices remained under pressure following holiday period due to low demand, sufficient supply and low feedstock propylene cost.
On the Supply Side, PO supply in the Chinese market remained moderate despite announcement of the production cut by the several companies after the holidays. However, the demand in the downstream remained limited and many companies are adopting a wait and see policy and purchasing cautiously.
Demand in the downstream polyether polyols, polyurethane remained weak and downstream manufacturer are only purchasing limited with strong wait and see attitude in the domestic market.
Feedstock propylene prices remained under pressure due to higher production and tepid demand, reducing the production cost of PO.
Further India’s antidumping on the Chinese copolymer polyols may increase the inventory in the Chinese market. DGTR found that Polyols import surged by 287% during the investigation period and capturing around 90% Indian market.
PO Capacity expansion has accelerated rapidly in the Chinese domestic market over the past few years, while demand has not kept pace with supply, which is exerting downward pressure on prices. PO manufacturers like Binhua Co., Ltd, are facing a significant challenge due to increased competition and capacity expansion by the multiple companies that are leading to the decline in profits.
Binhua’s financial report has deteriorated over three consecutive years, with net profits declining Y-O-Y. Binhua recently initiated a 240,000-ton/year PO project, aiming to revitalize its operations, but the domestic market is witnessing an excess supply as new production capacities come online.
PO demand in the European nations also remained weak, and prices are not increasing due to excess supply and limited demand. Additionally, demand from the end user construction sector has faltered, hindered by economic uncertainty and a lack of investment.
Dow announced (In early October 2025) plans to shut down its 94,000 t/yr polyether polyols production site at Tertre, Belgium, by the end of Q1 2026, reflecting the industry's difficulties with excess capacity, higher energy costs, and rising imports—reported to be 6.3% higher (polyols imports) than the previous year, with China being the leading supplier, followed by South Korea and Saudi Arabia.
INEOS halted production of 210,000 tonnes/year of PO at its Cologne site last month due to excess supply and higher energy prices, reflecting the sector's struggles.
As per the ChemAnalyst, PO prices are likely to remained under pressure due to elevated inventories and tepid demand in the European and Asian market.
