For the Quarter Ending March 2024
North America
Propylene Oxide prices in the first quarter of 2024 observed bullish sentiments in North American region owing to a newer contract for supplies coming into effect. January production and newer deliveries of gas and propane in North America deliveries saw significant deflation over previous contracts which has led to increase in cracker spread margins and downstream propylene and propylene oxide production. Propylene Oxide prices turned strongly bullish as demand improved in North America, with spot markets following the contract pricing movements, spot markets showed rigorous buying activities as downturns eased with pending orders slowing down due to higher utilization and production, especially USA. Consumption demand remained subdued for propylene oxide derivatives as Winter slump intensified with Mexican demand slowing, though inventories in North America remained on the higher end.
The month of February saw upward price revisions as temperatures improved with downturns easing. Spot markets saw significant inventory building activities with US FOB Louisiana quotations going up by USD 120/MT in certain spot deliveries to China Lunar New Year began its commencement coupled with supply disruption due to tanker shortages continuing in APAC region. Demand for propylene glycol and other polyols increased as inventory expansion in certain isocyanates market intensified. Furthermore, cosmetics and consumer markets continue to recover as business and consumer confidence continues to improve as service sectors growth offset slump in manufacturing in 2023.
Overall, the pricing environment for Propylene Oxide in the North American region during Q1 2024 has been positive, with prices increasing. This is reflected in the percentage change from the same quarter last year, which stands at -11% as demand slump continued into the first quarter of 2024.
Europe
The first quarter of 2024 observed bullish sentiments in European region owing to a newer contract for supplies coming into effect for propylene oxide prices. January production and newer deliveries of gas and propane in Europe deliveries saw significant deflation over previous contracts which has led to increase in cracker spread margins and downstream propylene and propylene oxide production. Propylene Oxide prices turned strongly bullish as demand improved in the Eurozone region, with spot markets following the contract pricing movements, spot markets showed rigorous buying activities as downturns eased with pending orders slowing down due to higher utilization and production, especially Belgium. Consumption demand remained subdued for propylene oxide derivatives as Winter slump intensified with Northern Europe observing high showers, railway strikes and protests, which had caused higher spot pricing while parts of Mediterranean and Southern Europe saw high production activities especially Italian markets.
The month of February saw upward price revisions as temperatures improved with downturns easing. Spot markets saw significant inventory building activities with German FOB Hamburg quotations going up by USD 50/MT in certain spot deliveries to China as Chinese Lunar New Year began its commencement coupled with supply disruption due to tanker shortages continuing in APAC region. Demand for propylene glycol and other polyols increased as inventory expansion in certain isocyanates market intensified. Furthermore, cosmetics and consumer markets continue to recover as business and consumer confidence continues to improve as service sectors growth offset slump in manufacturing in 2023.
Overall, the pricing environment for Propylene Oxide in the European region during Q1 2024 has been positive, with prices increasing. This is reflected in the percentage change from the same quarter last year, which stands at -11% as demand slump continued into the first quarter of 2024.
Asia Pacific
Propylene Oxide prices in the first quarter of 2024 observed mix sentiments in Asia-Pacific region owing to a newer contract for supplies coming into effect. January deliveries from Saudi and European deliveries saw significant downward price revisions for Asian deliveries as downturns and capacity utilization for propylene oxide supply turned stronger in European and Middle Eastern markets. Prices revised downwards to a tune of USD 100/MT in some deliveries, with spot markets following the contract pricing movements, spot markets for January remained subdued due to lower trading activities due to high inventories and weaker consumption as Winter progressed.
The month of February saw upward price revisions as temperatures increased in large parts of China, Korea and Japan with downturns easing. Spot markets saw significant inventory building activities with CFR Qingdao quotations going up in certain spot deliveries as Chinese Lunar New Year began its commencement coupled with supply disruption due to tanker shortages continuing in APAC region. Demand for propylene glycol and other polyols triggered the rise in spot prices as East Asia enlarged their inventories to cater to consumption demand led by China. The spot market turned dull again after the last week of February as Chinese markets came online with excess supply being destocked for the next two weeks, though propylene oxide consumption increased overall YoY basis, supply exceeded demand for New Year festivities. This was partially offset by pre-summer stocking especially seen in the propylene glycol inventories.
Overall, the pricing environment for Propylene Oxide in the APAC region during Q1 2024 has been positive, with prices increasing. This is reflected in the percentage change from the same quarter last year, which stands at -24% as demand slump continued into the first quarter of 2024.
For the Quarter Ending December 2023
North America
Prices of Propylene oxide showed mixed sentiment in Q4FY23 with stable prices in the month of October and falling prices till the end of quarter. Feedstock propylene largely provided negative cost coupled with weak energy prices in the given quarter amidst excellent US domestic crude and gas production and lower polypropylene demand.
Supply largely remained domestic. Construction related demand remained subdued with pending orders piling up although new procurement for Propylene oxide derived polyurethane showed uptick largely from commercial construction sector. Consumer demand, especially pharmaceuticals and bodycare, remained strong amidst resilient consumer spending and rising healthcare costs. Inflations Reductions Act driven sustainable energy transition policy in USA drove the polyurethane market to significant extent.
Residential Construction chemical markets are showing gradual signs of recovery with improving purchases for Propylene oxide derivatives, although the effect on prices remained weak. Automotive and Polymer markets remained other major drivers for propylene oxide derivatives volume. Asian markets continue to be the largest importers of Propylene oxide from North American markets Festivities and pent-up demand coupled with previous quarters delivery made the propylene oxide market strong in the current quarter. By the end of the quarter, prices started rising and rise in newer orders due to high CIF and CFR charges due to container and shipping shortages largely due to Panama and Suez Crisis.
Asia Pacific
Prices of Propylene oxide showed mixed sentiment in Q4FY23 with prices remaining stable in October and November and steeply falling prices in the month of December. Feedstock propylene prices largely provided negative cost coupled with weak energy prices in the given quarter amidst excellent US domestic crude and gas production and falling polypropylene demand amidst oversupply. Supply largely with substantial imports from Europe and North America. Construction related demand remained subdued with pending orders piling up although new procurement for Propylene oxide derived polyurethanes showed uptick largely from commercial construction sector. Consumer spending remained on the lower end amidst high financial debts marginally offset by uptick in Japan and India’s consumption. Demand for heat insulation and refurbishments continue to rise in Korean and Japanese markets amidst government approved schemes to transition into energy efficient complexes. Residential Construction chemical markets are showing gradual signs of recovery with improving purchases for Propylene oxide derivatives, although the effect on prices remained weak. Automotive and Polymer markets remained other major drivers for propylene oxide derivatives volume. Japan and Korean markets continued to be the largest suppliers of Propylene oxide to North American markets Festivities and pent-up demand coupled with previous quarters delivery made the propylene oxide market strong in the current quarter. By the end of the quarter, prices started stabilizing amidst falling newer orders due to high CIF and CFR charges due to container and shipping shortages largely due to Panama and Suez Crisis.
Europe
Prices of Propylene oxide showed mixed sentiment in Q4FY2 with prices showing price rise in the month of November largely owing to force majeure and stoppage of Repsol Quimica plant at Spain. Feedstock propylene largely provided negative cost coupled with weak energy prices in the given quarter amidst excellent US domestic crude and gas production and lower demand from PP markets. Supply remained largely domestic. Construction related demand remained subdued with pending orders piling up although new procurement for Propylene oxide derived polyurethanes showed uptick largely from commercial construction sector slowing down gradually by the end of quarter amidst strong winter and weakening of supply chain due to lower logistical capacities seasonally. Consumer demand, especially pharmaceuticals, remained subdued amidst weak consumer spending and rising healthcare costs while markets observed strong procurement in propylene oxide from cosmetic and body care segment largely which was later destocked in the month of December amidst disappointing festive sales. EU policy on transition to sustainable energy continues to drive the polyurethane market to significant extent. Residential Construction chemical markets are showing gradual signs of recovery with improving purchases for Propylene oxide derivatives, although the effect on prices remained weak in Netherlands, Italy and UK. Automotive and Polymer markets remained other major drivers for propylene oxide derivatives volume. China, Japan and Korean markets continued to be the largest importers of Propylene oxide by European supplies. Festivities and pent-up demand coupled with previous quarters delivery made the propylene oxide relatively strong in the current quarter despite setbacks from high interest rates. By the end of the quarter, prices started pulling amidst rise in newer orders due to high CIF and CFR charges due to container and shipping shortages largely due to Panama and Suez Crisis.
For the Quarter Ending September 2023
North America
Prices of Propylene Oxide observed a mixed sentiment in the third quarter of FY23 with the prices observing a bearish trend on the back of declining feedstock pricing and weak global demand in July, stable trend during the month of August due to marginal improvement in demand and bullish trend in September due to rising feedstock and energy cost. In July, prices showed bearish sentiment due to weak demand triggered by high interest rates and deflating energy and feedstock prices. Producers chemical margin deteriorated and operating rates remained low. Sales volume to Europe and Asia deteriorated as global sentiment remained weak. In August, consumption picked up in US economy as inflation moderated and inquiries revealed ‘green shoots’ observed in US economy triggered bullish sentiment in the commodity market. Major suppliers increased procurement activities including downstream PE plastics producers. In the month of September, demand remained stable while the feedstock price began their bullish trend which was also observed in the prices of Propylene Oxide. Chemical margins improved with better sales realization on the M-o-M basis. Demand was largely driven by retail packaging, Automobile. Private consumption improved while consumers continued to face high interest rates. Propylene Oxide sales in the downstream improved marginally as PE plastics suppliers increased their inventory levels. In the coming months, it is expected that prices are expected to improve further due to inflated energy and feedstock prices while demand is expected to drop due to weak global demand due to stressed construction sector.
Asia Pacific
Prices of Propylene Oxide observed a mixed sentiment in the third quarter of FY23 with the prices observing a bearish trend on the back of declining feedstock pricing and weak global demand in July, stable trend during the month of August due to marginal improvement in demand and bullish trend in September due to rising feedstock and energy cost. In July, prices showed bearish sentiment due to weak demand from the construction sector and subpar performance of PE intensive sectors like automobile, packaging etc. Producers chemical margin deteriorated and operating rates remained low. In August, consumption picked up in Chinese economy as People’s Bank of China reduced interest rates to increase demand especially to de-stress the construction sector. Major suppliers increased procurement activities including downstream PE plastics producers. In the month of September, demand remained stable while the feedstock price began their bullish trend which was also observed in the prices of Propylene Oxide. Chemical margins improved with better sales realization on the M-o-M basis. Demand was largely driven by retail packaging, Automobile. Private showed growth while the performance remained subpar. Propylene Oxide sales in the downstream improved marginally as PE plastics suppliers increased their inventory levels. Oversupply situation was observed, revealed by multiple inquiries as growth in construction sector continues to remain slower than expected. Across the quarter, multiple cyclones hitting Korea and China triggered regional price fluctuations for a short term. In the coming months, it is expected that prices are expected to improve further due to inflated energy and feedstock prices while demand is expected to drop due to weak global demand due to stressed construction sector.
Europe
Prices of Propylene Oxide observed a mixed sentiment in the third quarter of FY23 with the prices observing a bearish trend on the back of declining feedstock pricing and weak global demand in July, stable trend during the month of August due to marginal improvement in demand and bullish trend in September due to rising feedstock and energy cost. In July, prices showed bearish sentiment due to weak demand triggered by high interest rates and deflating energy and feedstock prices. Producers chemical margin deteriorated and operating rates remained low. Sales volume to Asia deteriorated as global sentiment remained weak. In August, consumption picked up in European economy as inflation moderated and inquiries revealed ‘green shoots’ observed in European economy triggered bullish sentiment in the commodity market. Major suppliers increased procurement activities including downstream PE plastics producers. In the month of September, demand remained stable while the feedstock price began their bullish trend which was also observed in the prices of Propylene Oxide. Chemical margins improved with better sales realization on the M-o-M basis. Demand was largely driven by retail packaging, Automobile and consumer renewables. Private consumption improved while consumers continued to face high interest rates. Propylene Oxide sales in the downstream improved marginally as PE plastics suppliers increased their inventory levels. In the coming months, it is expected that prices are expected to improve further due to inflated energy and feedstock prices while demand is expected to drop due to weak global demand due to stressed construction sector as HCOB Germany continue to remain below 50-mark.
For the Quarter Ending June 2023
North America
Propylene oxide prices have shown mixed sentiments in the US market during the second quarter of 2023. During the initial of Q2, Propylene oxide prices have inched lower due to gloomy demand and weak feedstock prices. The US market has been facing challenges as the severe impacts of inflationary pressures, tight monetary policies, as well as the financial sector worries have not vanished. On the other side, core inflation has constantly exceeded the targeted levels set by the US Federal Reserve and has been gradually decreasing at a slower pace, resulting in sifted trade activities. Meanwhile, inquiries from the downstream Polyether Polyol industries have remained tepid as consumption from the construction industries has slowed down amid economic woes, weighing down the prices of Propylene oxide in the domestic market. The oversupplies of feedstock Propylene have limited the positive development of Propylene oxide. However, during mid and end of Q2, Propylene oxide prices increased slightly. The demand for Polyether Polyol has improved as the construction sector has continued to revive in the domestic market. As per the sources, Housing starts rose to a seasonally adjusted rate of 1.631 million units in May to 1.34 million in April, thus supporting the prices to following the uptrend in the domestic market.
Asia - Pacific
Propylene oxide prices have inched lower in the Japanese market during the second quarter of 2023, backed by tepid demand and sufficient inventories. The cost pressure from feedstock Propylene was also insufficient as its prices progressed in a downward trend, reported by market participants. In addition, upstream Naphtha prices have also declined, which further supported the Propylene oxide to follow the downtrend in the domestic market. On the demand front, the inquiries from the downstream Polyether polyol have remained soft, resulting in decreasing consumption rates in the domestic market. At the same time, demand from the overseas market has also remained on the lighter side amidst high inflationary pressure and rising interest rates which weighed down the prices of Propylene oxide. On the other side, Japan's manufacturing activity slipped into contractionary territory in June, with a purchasing managers' index (PMI) reading of 49.8, down from 50.6 in May, indicating a contraction in industrial and manufacturing activities. In addition, Japan's export rates declined in June, emphasizing weak Chinese and Western demand that continues to undercut the post-COVID recovery in the world's third-biggest economy. As per the sources, exports to China declined 11% year-on-year in June. Furthermore, the operating rates were reduced in the domestic market as manufacturers were cautious about building up excessive inventory. Although, the availability of finished stock of Propylene oxide was sufficient to meet the overall downstream demand. Therefore, prices operated at a low level.
Europe
Propylene oxide prices have inched lower in the German market during the second quarter of 2023, backed by limited demand and sufficient inventories in the domestic market. The cost pressure from the feedstock Propylene was also insufficient as its prices progressed in a downward trend in the given time frame. On the other side, upstream Naphtha prices have also been observed on the lighter side, which further eased the production cost of Propylene oxide in the domestic market. The firm inflation rates and consequent rise in interest rates to contain it had a heavy toll on the demand fundamentals. The underwhelming performance of construction industries in Q2 is a bleak example of toll. Meanwhile, the inquiries from the downstream polyether polyol industries have remained soft, resulting in declining consumption rates and weighing down the prices of Propylene oxide in the domestic market. Furthermore, some manufacturers have started their destocking activities amid persistent gloomy demand. In addition, Specialty chemicals company LANXESS also expects second-quarter 2023 EBITDA pre-exceptionals to remain below average market expectations. LANXESS now expects the weakness to continue in the second half of 2023, especially in the construction sector, which may further impact the prices of several commodities, including Propylene oxide.
For the Quarter Ending March 2023
North America
The Propylene Oxide price trend shifted during the Q1 of 2023. In the first month, prices decreased due to feeble offtakes from downstream Polyol and Glycol industries amid a reduction in manufacturing activities. However, during the mid-quarter, prices rebounded amid rising inflation and high-interest rates by US Federal Reserve and improved supply chain activities. In the final month of the quarter, an increase in production capacity after the successful start of LyondellBasell’s Propylene Oxide plant at Channelview Texas, with a production capacity of 470 KTPA, decreased the prices amid volatile upstream costs and increase in feedstock prices. At the end of the quarter, Propylene Oxide prices in the USA hovered at USD 1640/MT.
Asia
In the Asian region, the price trend of Propylene Oxide showcased a bullish movement during quarter 1 of 2023. At the beginning of Q1, prices rose slightly amid moderate demand and increased feedstock Propylene prices due to firmness in upstream Naphtha. Simultaneously from the mid-quarter, the feedstock Propylene Oxide costs rose noticeably due to stressed availability and volatile upstream crude oil prices amid increased sanctions on Russian products. During the final month of the quarter, prices again spiked due to limited production rates amid reduced imports of Crude Oil and a rise in cost pressure. At the end of Q1, 2023, Propylene Oxide prices in China and Japan witnessed USD 1425/MT and USD 1360/MT, respectively.
Europe
The Propylene Oxide prices trend oscillated during quarter 1 of 2023. Initially, the prices declined due to weak demand from Polyol and Glycol manufacturers. However, in the mid-quarter, prices rebounded and rose slightly amid the stressed availability of feedstock Propylene supplies after increased sanctions on Russian Petroleum products, which affected the production rates. Then again, in the H2 of the quarter, the price trend showcased bearish movement, and Propylene Oxide prices fell consistently due to sluggish offtakes. At the same time, the decrease in input costs due to the decline in Natural Gas prices further eased the cost support. At the end of the quarter, the Propylene Oxide prices in Germany hovered at USD 1820/MT.
For the Quarter Ending December 2022
North America
At the beginning of the fourth quarter, Propylene Oxide prices rose slightly on the back of stable consumption levels amid the rise in inflation rates. Then the price trend shifted, and product prices started decreasing in the North American region. From the mid-quarter onwards, the feedstock Propylene prices decreased on the back of firm inventory levels and a reduction in WTI Crude oil prices. Production rates remained firm, and due to this, production costs of Propylene Oxide decreased. The prices declined till the end of Q4. The product offtakes also plunged from the mid-quarter and remained low till the end of quarter 4. At the end of Q4 2022, Propylene Oxide prices in the USA settled at USD 1620/MT.
Asia
A decreasing price trend of Propylene Oxide was observed in the Asian region during Q4 of 2022. During the quarter, the product exports from South Korea were affected to the key importer China due to truck strikes near the Busan port amid a decrease in manufacturing and trade activities in China amid disruption in the supply chain due to the rise in covid cases. The market situation improved towards the end of the quarter, and Propylene Oxide prices fell again due to destocking practices by the regional exporters amid ease in the global freight charges. At the end of Q4 2022, Propylene Oxide prices in China hovered at USD 1220/MT.
Europe
In the European region, the Propylene Oxide price trend remained the same as in North America. Initially, the product prices rose marginally due to increased production costs amid input supply shortages because of an explosion at the Beixi pipeline. At the same time, offtakes by downstream Polyol producers declined due to reduced orders from Polyurethane industries amid insufficient availability of TDI components. From the mid-quarter, the facilities started operating moderately amid high inflation and reduced offtakes. The product prices decreased by producers like LyondellBasell by reducing their profit margins due to limited operations and offtakes by downstream industries. This trend continued till the end of the quarter, and Propylene Oxide prices in Germany settled at USD 1950/MT at the end of Q4 2022.
For the Quarter Ending September 2022
North America
In North America, the price trend of Propylene Oxide oscillated in the 3rd Quarter of 2022. In the first half of the Quarter, prices decreased consistently due to a reduction in the production costs caused by weak feedstock Propylene prices. Simultaneously, an increase in inventory levels due to diminished product offtakes further negatively impacted product prices. However, from the mid-quarter, the price trend shifted, and Propylene oxide prices rose consistently till the end of Q3 due to the rise in feedstock propylene costs which raised fixed costs on the product values. However, at the end of the 3rd Quarter, the US Propylene Oxide prices settled at USD 1835/MT after a quarterly reduction of almost 12%.
Asia
Propylene Oxide's prices fluctuated in Asia during Q3 of 2022. Initially, the price movement followed the previous Quarter's trend, and prices decreased due to the plunge in feedstock Propylene prices, reducing the production costs of PO. However, in the mid-quarter, the price trend revived, and product prices inclined upward due to the rise in feedstock prices when OPEC increased the upstream Crude oil prices and production curtailment on the Government's instructions due to heat waves during summer and power outages in countries like Japan and China. Finally, in the final month of Q3, prices again fell due to a decline in demand from the downstream glycol producers and increased product inventory levels. After a plunge of 22% in the Quarter 2 prices, Propylene Oxide Japan's discussions settled at USD 1240/MT at the end of Q3,2022.
Europe
Propylene Oxide prices trend fluctuated in Europe during Q3 of 2022. In the first half of the Quarter, the product prices decreased consistently due to a reduction in feedstock Propylene costs as the downstream orders from Polyolefin producers fell after observing stale demand from durable goods manufacturers. It eased the upstream cost pressure on the product prices. At the same time, the rationing of input supplies from the Russian exporters resulted in pressure on European manufacturers, and the domestic downstream producers cut their operational rates amid the rising inflation. Also, the high inflation depreciated the Euro values against the US Dollar. However, after the mid-quarter, the price movement fluctuated, and product prices increased steadily in H2 till the end of the Quarter. At the end of Q3, Propylene oxide prices settled at USD 2145/MT in Germany after a reduction of almost 9% during the third Quarter.
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.
