In the first half of January, the domestic epoxy propane market continued its strong momentum, with prices significantly rising. According to the monitoring system of Shengyi Society, as of January 13th, the benchmark price of Shengyi Society’s epoxy propane was 8333.33 yuan/ton, an increase of 7.76% compared to January 1st. The price increase this time is the result of multiple favorable factors resonating, and the market is expected to maintain a strong operation in the short term.
| Gamma-PGA (gamma polyglutamic acid) |
Supply side: The unexpected tightening of the market supply side is the basis for this price increase. Firstly, the main production facilities in many places have experienced load reduction or shutdown. The load of multiple units in the main production areas of Shandong has decreased, while key units in East China such as Zhenhai Phase II and Sinochem Quanzhou are also in a state of shutdown and maintenance. This resulted in a relatively low national capacity utilization rate of 73.47% on that day. Secondly, industry inventory has dropped below the “safety cushion”. As of January 9th, the overall inventory of the industry is about 40000 tons, far below the safety warning line. Factory inventory is generally low, and spot supply remains tight. The sudden tightening of the supply and demand pattern has directly enhanced the willingness of producers to raise prices.
Demand side: The hot demand side is the core engine driving price increases. On the one hand, the downstream polyether industry is experiencing expansion in production. For example, new facilities such as Shandong Longhua and Guangxi Tongkun have been put into operation, directly increasing the rigid consumption of epichlorohydrin. On the other hand, the “last train” effect of a key policy has become prominent. According to the announcement of the Ministry of Finance, the export tax rebate policy for primary shape polyether will be cancelled from April 1, 2026. In order to complete orders before the policy window closes, there has been an “early surge” in downstream foreign trade demand, with a large number of export orders being placed in the first quarter for centralized production. At the same time, domestic trade customers also proactively replenish their inventory due to concerns about the subsequent increase in raw material prices. The resonance of internal and external demand has made the market trading atmosphere active, effectively digesting high priced sources of goods.
On the raw material side: The upward trend in the market price of raw material propylene has also contributed to the upward trend, providing stable cost support. According to the monitoring system of Shengyi Society, as of January 13th, the benchmark price of propylene in Shengyi Society was 5921.00 yuan/ton, an increase of 3.56% compared to the beginning of this month (5717.67 yuan/ton).
Market forecast: Business Society’s epoxy propane analyst believes that under the clear expectation of “tight supply and demand”, the market’s bullish sentiment will quickly heat up. Downstream enterprises have shifted from wait-and-see to actively replenishing inventory to cope with potential price increases and tight supply in the future. At the same time, the price of propylene, the main upstream raw material, also showed a stable and slightly rising trend in mid January, providing relatively stable cost support for epoxy propane. Overall, under the combined effects of low inventory, pre demand, and tight supply, it is expected that the price center of epoxy propane will continue to rise in the short term. The future market trend requires close attention to the restart progress of large-scale facilities such as Sinochem Quanzhou, as well as the actual sustainability of the “rush to export” of polyether.
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