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Propylene Oxide Price Trend and Forecast

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Propylene Oxide Price Trend and Forecast

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Market Overview

For the Quarter Ending June 2022

North America

Throughout quarter 2, the price trend of Propylene Oxide fluctuated in the North American region. However, the price rose by 15% from the previous quarter. After global inflation, the feedstock petrochemical Propylene prices surged significantly, due to which Propylene Oxide prices increased sharply in H1 of Q2. However, feedstock prices decreased mid-quarter, negatively impacting the product’s price. Additionally, fuel and energy costs rose in the region. And towards the end of the quarter, Propylene Oxide prices were firm and rose marginally. The demand for Propylene Oxide from downstream isocyanates and Polyurethane manufacturers remained moderate, with firm product offtakes from the regional market.

Asia

During Q2, the price of Propylene Oxide contracted consistently in the Asian region. Petrochemical was the hardest hit market after global inflation, and feed propylene prices plummeted sharply after the Russian crude Oil imports in the region, specifically in India and China. Towards the end of the quarter, China cleared its stock inventories of the product after an ease in lockdown and reopening of the Shanghai port as the built stock inventories in China amid the hiatus caused by the three months lockdown. Freight and energy costs remained fluctuated; overall, Propylene Oxide Prices decreased by almost 5-6% from quarter 1 of 2022.

Europe

In the European region, the price of Propylene Oxide remained strong and rose noticeably by 19% from quarter 1 of 2022. At the beginning of the quarter, a steep rise in the feedstock Propylene Cost significantly boosted the Propylene Oxide cost. However, in the mid-quarter, product prices stabilized, after firmness in the feedstock cost, and towards the end of the Q2, the product prices were stable and firm. Energy and fuel costs rose in the region due to supply shortages of gas which impacted cost pressure and curtailed the production rates of Propylene Oxide. The demand remained firm from downstream isocyanates, Polyol, and glycol producers with average offtakes of product from the regional market.

For the Quarter Ending March 2022

North America

The North American market witnessed an upsurge in the prices of Propylene Oxide during the Q1 of 2022, on the back of robust downstream demand and higher upstream cost. As construction and automotive industries were growing in the last quarter, the consumption of polyurethane increased, which led to the stronger demand for Propylene Oxide. Besides, the prices of upstream Propylene were also rising, which consequently caused the price hike of Propylene Oxide. Furthermore, skyrocketed crude oil prices, enhanced freights charges, cargoes shortage, and port congestions amidst Russia-Ukraine war tensions added to the already augmented price value of Propylene Oxide. Conclusively, the prices of Propylene Oxide assembled at USD 3725/MT FOB Ohio during March.

Asia Pacific

The prices of Propylene Oxide soared in the Asia-Pacific region during the Q1 of 2022, on the back of firm demand from end-user industries. The escalated prices of upstream Propylene in the domestic market propelled the prices of Propylene Oxide. Furthermore, the enhanced consumption of Polyurethane in construction, automotive, and healthcare industry, augmented the offtake of Propylene Oxide from various Asian countries. In addition, intensified demand for Propylene Glycol to manufacture fibre glass, accelerated the surge in the prices of Propylene Oxide. Moreover, increased energy costs and freight charges due to the continued conflict between Russia and Ukraine, further exacerbated the price of Propylene Oxide. In India, the evaluated prices of Propylene Oxide were USD 2871.25/MT Ex-Mumbai during March 2022. Likewise, the prices of Propylene Oxide in Chinese domestic market were assessed at USD 1922.5/MT FOB-Qingdao in March 2022.

Europe

In Europe, prices of Propylene Oxide soared during the Quarter 1 of 2022, on account of strong demand for Polyurethane and Propylene Glycol. Prices of feedstock Propylene which is one of the governing factors for Propylene Oxide prices, fluctuated in the range between USD 1421 to 1500 per MT in Germany. The consumption of Polyurethane surged in several industries including the construction and automotive sectors to manufacture rigid or flexible foams. Besides, the increased offtake of Propylene Glycol in anti-freeze industries due to the winter season, escalated the prices of propylene Oxide. Furthermore, enhanced propylene prices, exacerbated the prices of Propylene Oxide even more. In addition, the skyrocketed crude oil prices, congested ports, cargoes shortage and increased freight charges further pushed the Propylene Oxide Prices upwards.

For the Quarter Ending December 2021

North America

The propylene oxide market in North America entered the fourth quarter of 2021 on bullish sentiments. The prices rose incessantly during October and a major part of November on the back of the surge in propylene feedstock prices. Influenced by the crude oil supply shortage in the region majorly due to the low refinery operations owing to the still undergoing repair works at Louisiana facilities after landfall by Ida hurricane, the supply of propylene feedstocks remained tight in the propylene oxide facilities. However, the USA market witnessed tamed propylene oxide prices in December, which settled at USD 3465/MT FOB Louisiana, taking support from wane in propylene prices as well as improved offtakes in international downstream markets post supply chain refurbishment.

Asia

The ripple effect of the increase in crude oil prices upon its tightness across the globe caused propylene along with other oil derivatives to gain values in price trends, in turn driving up the prices of propylene oxide in Asia, during October and November. The demand for propylene oxide in the polyurethane industry remained sturdy throughout the quarter. With spot activity gaining pace following slight relaxation in port container crisis across the world in December, the timely arrival of import supplies compelled the traders in India to make negative revisions in propylene oxide contracts that hovered around USD 2934/MT Ex-Mumbai. Meanwhile, Japan market also exhibited a lowering in the prices of propylene oxide during December after reaching record highs in November, however, the decline in percentage was not significant enough owing to consistent offtakes in the polyurethane industries.

Europe

The European market bore the wrath of crude oil supply tightness as well as skyrocketing energy prices, both contributing to constraints in manufacturing propylene oxide, thereby causing its prices to climb up significantly throughout the fourth quarter of 2021. The incessant rise in the upward cost pressures amid the surging demand for propylene oxide in the downstream polyol industry caused the manufacturers to implement frequent price revisions on the upward side in order to earn considerable netbacks. Germany prices settling around USD 3595/MT FOB Hamburg during December indicated insubstantial domestic inventories amid improved export activities.

For the Quarter Ending September 2021

North America

The domestic market witnessed an uprise in prices of Propylene Oxide in the North American region during Q3 2021. Increasing Propylene prices and shortage of inventories of Propylene Oxide culminated in tightened supply fundamentals for the material. A similar trend was reported worldwide as PO supply reduced drastically since the beginning of the year. Limited availability of raw materials and increasing cost of production have dually impacted the production rates across the region. Furthermore, restricted logistic availability in the region has also worsened the supply chain during the quarter. Demand for PO has been robust in the 3rd quarter as downstream isocyanates continue to pull increased number given the rising demand for polyurethanes in the US market. Hence prices of Propylene oxide followed an upward trend throughout Q3. The global PO market has been suffering from a shortage due to unplanned turnarounds by major producers like Dow amidst Hurricane Ida related outages.

Asia Pacific

The prices of Propylene Oxide rose significantly in the Asia Pacific region during the third quarter. The prices of upstream Propylene remained firm in Q3 due to the increased inflation rates in the Chinese domestic market. Propylene Oxide manufacturers in China received consistent orders from the downstream polyether polyol manufacturers which led to the increment in PO prices. Shortage of Propylene Oxide around the globe showcased spill over effects on the Indian market, resulting in the steep rise in its prices. Propylene Oxide CFR JNPT (India) price was lastly settled at USD 2555 per MT in the month of September.

Europe

In the European region, the overall PO market outlook experienced an upward trajectory in the third quarter of 2021. An improvement in supply conditions was observed across the region. Limited availability of upstream Propylene to produce Propylene Oxide led to an increment in its prices during Q3 2021. Offtakes of the PO derivatives from the construction sector remained firm throughout the quarter. Demand for Propylene Glycol showed resilience from the cosmetics and pharma industries in this as well.

For the Quarter Ending June 2021

North America

As the US chemical industry showed recovery from the devastating impact from the winter storm Uri, better operations at refineries and PDH units supported the ease in supplies of Propylene Oxide in the North American region compared to the previous quarter. However, better availability did not impact the regional pricing which continued to rally upwards throughout the quarter. FOB Louisiana (USA) discussions settled at USD 2581 per tonne in June, showing an increment of USD 356 per tonne from the levels seen in March. The supply-demand outlook remained unbalanced in the second quarter as seasonal offtakes improved from the downstream polyol manufacturers to meet surging demand from the construction sector. The demand was further strengthened by rising polyol and Propylene Glycol exports.

Asia Pacific

The supplies of Propylene Oxide in the Asia Pacific region were ample to cope up with the end use segments, but the demand scenario was different in several major economies throughout the region. In China, due to surged inflation rates, the prices of the key feedstock Propylene remained firm for a larger part of Q2 which further led to resistance among the buyers. FOB Qingdao PO discussion was settled at USD 1981 per tonne in June. Chinese Propylene Oxide manufacturers reported consistent orders from the downstream polyether polyol manufacturers increased steadily and the prices showed gains in support. In Southeast Asia, second COVID wave severely impacted the downstream markets, thereby denting the demand.

Europe

The supply conditions in the European region remained tight as turnaround at several PDH, refineries and plants limited the Propylene availability to produce Propylene Oxide in the second quarter of 2021. However, some supply constraints were eased as imports from the North American region improved after a sharp slump seen in March 2021. Pricing trend was in alignment with the demand trends which remained high due to consistent offtakes of the PO derivatives from the construction sector. The demand for Propylene Glycol showed resilience from the cosmetics and pharma industries.

For the Quarter Ending March 2021

North America

During the Q1 2021, the supplies of PO remained tight as major US Propylene plants were shut for the planned maintenance during the first half of 2021. The tight supply situation was further aggravated as several Propylene producers remained disrupted, amid deep freeze weather in the US gulf region. However, improved consumption from the downstream polyols, and polyurethanes sector surged the demand in the region. Due to inclined demand and shortage in supplies, regional PO prices witnessed a multi-fold surge in March settlements with prices crossing USD 2600 per Mt in mid-March.

Asia-Pacific (APAC)

PO supplies were increased during the first quarter of 2021 as turnarounds in several major plants in the north-east Asian region come to an end. Furthermore, addition of new production facilities in China surged the overall supply in the APAC region. However, PO market in China remained muted due to Chinese Lunar New Year holidays, resulting in mixed results from the demand side. In the second half of Q1, consumption from the downstream propylene glycols and polyols improved triggering increment in the overall market prices.

Europe

The supply of Propylene Oxide in the European region remained tight throughout the first quarter as a repercussion of reduced production of feedstock from the refineries amid the rising pandemic cases and fresh lockdown restrictions. The ongoing situation advanced, as the imports from Asia were hampered due to the Chinese lunar new year, followed by the disruption caused by the US extreme weather conditions. However, the demand persisted to stay strong throughout the quarter from the regional polyol manufacturer.

For the Quarter Ending September 2020

Asia

Producers were heard re-examining their spot and contractual sales amidst the astonishing drop in overall Propylene Oxide supplies due to scheduled maintenance and upcoming turnarounds at several manufacturing facilities. Sturdy demand for Polyols also directed some of the integrated PO producers to adhere a shift to Polyol production rather than selling Propylene Oxide directly. As China’s furniture and home furnishing segment entered into the peak demand season after observing 16.4 percent hike in July, demand for downstream Polyols rallied upward in September. Supply tightness rose as several Shandong-base PO plants underwent sudden environmental checking compelling them to reduce their production rates. With scheduled maintenance turnaround of Nanjing Hongbaoli’s Hydrogen-peroxide Propylene Oxide from August end to late September, overall operating rates of PO plants in China prominently reduced to 77 per cent by the quarter end. Spot prices of PO in China previously hovering at USD 2350 per MT, touched USD 2400 per MT by September end.

North America

Strong revival in downstream Polyol demand positively affected the market sentiments of Propylene Oxide (PO) in North America. An abrupt mismatch due to limited production and unexpected rebound in downstream demand widened the demand and supply gap for its derivatives in the market. In line with the steep inclination in demand patterns, prices of Propylene Oxide in the region saw a quick pickup by September. With force majeures declared on several production units on the Gulf coast amidst fears of Hurricane Laura, the overall supply of Propylene Oxide in the region tightened leading to further increase in its average prices for the quarter.

Europe

With appreciable revival in demand from the downstream segments, local Propylene Oxide (PO) producers were observed increasing their operating rates in quarter ending September. Tightened supply in the global market directly affected the market fundamentals of Propylene Oxide in Europe leading to low inventory levels amidst substantial demand for the downstream Polyols. Although offtakes from the downstream Mono-propylene Glycol (MPG) and Polyethylene Glycol (PEG) segments remained low but it laid a minute impact on the overall supply fundamentals which are already rallying upwards on strong Polyol demand.

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Services

Market Analysis

Company-wise installed capacity, production volume and plant operating efficiency is captured directly from manufacturers. Import and Export volume is captured from government sources and demand for Propylene Oxide is calculated considering the production, import, export and inventory-levels on the country and regional level markets.

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Pricing Analysis

The product price is correlated with the price trend of crude oil, demand-supply gap, fluctuations in the feedstock and with the market movement of the downstream sectors.

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Company Profile

Basic details and information on financial performance of leading global players in the Propylene Oxide market is presented in a visually captivating manner. Expansion plans and the company’s strategy is also captured to understand the vision and mission of the company to help understand the areas where companies need to focus more.

News & Deals

Daily updates on industry-specific and product-specific news, exclusive primary-based news capturing plant shutdowns/outages/closures, capacity expansions, operating rates, insights on demand-supply situation, awarding of technology licenses, new product launch and deals specifying mergers and acquisitions, strategic investments and disinvestments, to help players capitalize on market opportunity.

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Methodology

ChemAnalyst gathers information through primary research surveys conducted with various Propylene Oxide manufacturers, spread across the domestic and international market, suppliers and dealers/distributors to gain insights into value-chains and demand-supply scenario to assess the market situation. Thorough study of company’s annual reports and secondary sources such as exhaustive search on credible paid databases, including our internal database is done to verify the information. All the collected information is analyzed, evaluated and presented in chronological order to depict a meaningful and clear picture of the concerned market.

Our dedicated team of industry experts comprehensively monitors and analyzes various aspects of the Global Propylene Oxide market. The team analyzes various industrial segments, strategic viewpoints and provides an analysis of the industry’s performance in the long run. This would enable our clients in efficiently plan their future investments, mitigate risk, understand the cost dynamics and strike out a balance amidst market volatility.

Critical examination of the impact of COVID-19 pandemic on the global supply chains and shift in demand patterns with change in buying behavior of consumers across the globe.

Several ongoing development projects across industries are tracked, followed by the details of major projects in the development stage, which can positively or negatively influence Global Propylene Oxide market.

Pricing is captured through exhaustive primary interviews with domestic and international manufacturers, traders and importers and customers on monthly and yearly basis.

Finally, region-specific markets for Propylene Oxide are analyzed and region-wise demand pattern is tracked.

About

Propylene Oxide (PO) is colorless, reactive compound belonging to the epoxide product family. PO is primarily utilized in manufacturing of polypropylene glycol and polyether polyols. In addition, the product is also used to produce glycol ethers and dipropylene glycol along with the manufacturing of surfactants, lubricants and oil demulsifiers. Propylene Oxide was traditionally produced by the epoxidation and chlorohydrin routes. Nowadays, advanced technologies based on Cumene Hydroperoxide and Hydrogen Peroxide routes are now being commercialized. Despite of its high production cost and need of heavy effluent treatment system, majority of the plants are still operating under chlorohydrin process. Presently, companies are focusing to develop new production technologies that prevent the release of co-products which require extensive treatment in line with a new cumene hydro peroxidation technology. Furthermore, various companies are innovating technologies to utilize Hydrogen Peroxide for producing Propylene Oxide.

Product Specific Details

CAS No:	75-56-9
HS Code:	29012000
Grade:	Technical
Contract Size:	100 MT
Packaging Type:	Drum/Tanks

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Countries Covered:

• China

• Germany

• India

• Japan

• United Kingdom (UK)

• United States of America (USA)

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Propylene Oxide Price Trend and Forecast

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