Propylene oxide (PO) prices in the United States continued to decline over the past month, driven by weak domestic demand, high inventories, lower feedstock propylene costs, and slowing export activity. These factors collectively kept PO market sentiment subdued, resulting in a 3% month-on-month price drop in November.
On the supply side, overall availability of PO remained stable. No major plant outages were reported, and feedstock propylene supply was sufficient. However, consistently high factory inventories placed persistent downward pressure on PO prices.
Manufacturing activity in the U.S. also remained muted, as producers continued to face a shortage of new orders and struggled to secure buyers in both domestic and international markets.
The United States exports significant volumes of PO to the Netherlands and Asian countries, including China and Taiwan. Recently, orders from these markets have fallen steadily each month. In Europe, the slowdown in the construction sector has directly reduced demand for PO-derived products.
In Asia, China’s domestic capacity expansions, a cooling real estate sector, and ongoing tariffs on U.S. imports have sharply lowered Chinese demand for U.S. material.
As a result, U.S. PO exports have declined recently by 6.8% month-on-month, adding to domestic inventory pressure and contributing further to the price decline.
Feedstock propylene prices also continued to weaken. This trend was supported by lower upstream crude oil prices and high inventory levels.
According to recent EIA data, propane/propylene inventories dipped slightly in the week ending 28 November but remain about 15% above typical seasonal levels. Total commercial petroleum inventories rose by 5.2 million barrels during the same period.
Crude oil prices stayed soft due to easing geopolitical tensions in the Middle East, slowing U.S. consumption, tariff-related concerns, and rising domestic crude stocks. U.S. commercial crude oil inventories (excluding the Strategic Petroleum Reserve) increased by 0.6 million barrels during the week ending 28 November 2025. These conditions collectively lowered propylene costs and, in turn, reduced PO production costs.
On the demand side, consumption from downstream polyether and propylene glycol industries stayed limited. The end-user construction sector showed no significant improvement. Although industrial construction grew by 2.24% due to new manufacturing investments, residential construction continued its multi-year decline, and civil infrastructure activity slowed. Broader economic uncertainties, including fluctuating material and energy costs, labor shortages, and lingering supply-chain risks—kept buyers cautious.
Looking ahead, PO prices are expected to face further downward pressure. Year-end destocking and sellers offering discounts to attract limited buyers may drive prices lower. Downstream purchasers are also likely to delay procurement in anticipation of additional price declines amid weak market momentum.
