Price trend in 2023:
According to the Commodity Market Analysis System of Business Society, the epoxy propane market will experience slight fluctuations and an increase in 2023. On January 1, 2023, the average price of epoxy propane enterprises was 8966.67 yuan/ton, and on December 31, the average price of epoxy propane enterprises was 9225.00 yuan/ton, with a 2.88% increase in the annual market.
In the first half of the year, the cost support in January was average, with no pressure on the supply side, and the demand side mainly followed up on demand. Downstream stocking was concentrated before the holiday, and the epoxy propane market saw a narrow rise. In February, the raw material propylene fluctuated narrowly, the price of raw material liquid chlorine rose, and the cost support increased. Some devices underwent load reduction and maintenance, resulting in a reduction in market supply. The demand side was wait-and-see and followed up, and the epoxy propane market operated strongly. In March, there was no pressure on the supply side at a low level, supporting market prices to rise. In the latter half of the year, cost support weakened, and shipments from factories in production were average. The market trading atmosphere was light, and the epoxy propane market was weak and consolidating. The cost side had little impact in April, while the demand side remained flat and followed suit, resulting in a narrow decline in the market. In May, the epoxy propane market fluctuated slightly, with some fluctuations on the supply side in the first half of the month. The market supply and demand pattern was tight, and the demand side watched and followed moderately. The supply side had no pressure to support the strong operation of the epoxy propane market. In the second half of the month, as the price of raw material propylene fell, the raw material liquid chlorine fluctuated at a low level. In addition, the supply side’s capacity utilization rate slightly rebounded, and the demand side’s reduction followed up, weakening the epoxy propane market. In June, the demand side mainly followed up with a moderate amount of rigid demand, while changes in supply side equipment affected the market. The trend of the epoxy propane market fluctuated and fell.
In the second half of the year, the cost support in July was average, factory shipments were still acceptable, and the demand side watched and followed up, resulting in a narrow consolidation of the market. In mid August, factory shipments were average, but downstream follow-up has weakened slightly. Some inventories have been slightly under pressure, and some companies have lowered their prices. In September, the cost support was relatively strong, with some devices experiencing a decrease in load. The demand band followed suit, but the market fluctuated slightly and rose. The cost support weakened in October, with downstream consumption of inventory raw materials as the main source. The ability to follow up on epoxy propane was average, and the market slightly declined. In November, some inventory on the supply side slightly accumulated at the beginning of the month, and prices slightly loosened. In mid month, there were individual fluctuations in the supply side equipment, and the demand side performance was flat, with a stable but weak market trend. The epoxy propane market slightly declined in December, with average cost support. In mid month, factory shipments were flat, and downstream follow-up was limited. Some inventory was under pressure, and the market was weak. In the latter half of the year, downstream purchases followed up, and inventory pressure was controllable. Some companies quoted higher prices, and the market atmosphere was still good.
Price forecast for 2024:
Supply side: In 2023, China’s epoxy propane production capacity saw a significant growth rate, with new production capacity including 150000 tons/year from Tianjin Petrochemical and 300000 tons/year from Jincheng Petrochemical. In 2023, the total production capacity exceeded 6.1 million tons/year, and the production also increased by more than 10% year-on-year. The expected continuous expansion of production capacity in 2024 is expected, with new production capacity expected to be around 3 million tons per year, and the supply side may be in a relaxed state.
Demand side: propylene oxide is an important basic chemical raw material, mainly used for the production of polyether polyols, propylene glycol and various non-ionic surfactants, among which polyether polyols are important raw materials for the production of polyurethane foam, insulation materials, elastomers, adhesives and coatings, and various non-ionic surfactants are widely used in petroleum, chemical, pesticide, textile, daily chemical and other industries. The growth rate of demand side production capacity in 2023 is not as high as that of epoxy propane, so it is mainly expected to follow up with low rigid demand. In 2024, the downstream polyether polyol and propylene glycol industries may increase production capacity.
Comparison chart of annual price trends of epoxy propane and downstream propylene glycol in 2023
Import and export: According to customs data, the total export volume of epoxy propane in China from January to December 2023 was 4303976 kilograms, a year-on-year decrease of 63.48%. According to customs data, the total import volume of epoxy propane in China from January to December 2023 was 345731204 kilograms, a year-on-year increase of 13.64%. It is expected that the import volume will continue to grow in 2024.
Cost side: Upstream propylene: In 2023, the Chinese propylene market fluctuated and declined. Taking Shandong propylene as an example, the average price at the beginning of the year was 7244.60 yuan/ton, and the average price at the end of the year was 6868.25 yuan/ton, with a 5.19% decline in the domestic market. Based on a comprehensive analysis of crude oil and supply and demand, it is expected that the center of gravity of propylene prices in 2024 may continue to decline compared to 2023, and the expected decline is relatively controllable.
Comprehensive prediction:
In summary, the expected growth of epoxy propane production capacity in 2024, market competition pressure may increase, and the timing of new production capacity deployment and the start and stop of enterprises are worth paying attention to. The demand side is also expected to increase, and downstream companies may still maintain a cautious and just need to follow up mentality while observing the loose supply side. The use and purchase model, market game consolidation situation may still exist, combined with the cost impact of different processes, It is expected that the epoxy propane market will continue to adjust its operating status in 2024.
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