According to SunSirs’ data, the propylene glycol market in the latter half of May exhibited a “V-shaped” recovery trend—declining initially before rebounding. In the middle of the month, market prices dipped to a cyclical low, dragged down by the continued weakness in raw material costs; however, by the end of the month, prices staged a rapid recovery, driven by a rebound in raw material markets and a phase of inventory replenishment. As of May 29, the average ex-factory price for propylene glycol in the Shandong region stood at 10,000 RMB/ton, representing an increase of 2.39% compared to mid-month levels.
Key Drivers
Raw Materials: Propylene oxide has halted its decline and rebounded, though underlying support remains relatively weak.
After undergoing a sharp decline, the price of the raw material propylene oxide staged a corrective rebound toward the end of the month. This recovery was driven by the stabilization of upstream propylene and liquid chlorine prices, as well as maintenance shutdowns at certain production facilities; consequently, it pushed up the cost line for propylene glycol and served as the direct catalyst for the latter’s price rebound. However, the supply-demand balance for propylene oxide remains relatively loose, casting doubt on the sustainability of this rebound. Furthermore, cost support for propylene glycol has not yet fully solidified, making it difficult to sustain a continuous and substantial rise in prices.
Supply Side: High Operating Rates + Inventory Pressure Limit Upside Potential
Domestic propylene glycol plants continue to operate at rates exceeding 70%, resulting in ample spot supply; consequently, manufacturers remain under inventory pressure. The market rebound observed at the end of the month was largely a passive response—tracking the rise in raw material costs—rather than an active attempt to drive prices higher. Several manufacturers plan to undertake maintenance shutdowns in June; if these scheduled maintenance activities are carried out as planned, they could provide temporary relief from current supply pressures.
Demand Side: Seasonal Weakness; Insufficient Sustainability in Inventory Replenishment
Downstream sectors—such as unsaturated resins and coatings—remain in their traditional off-season. With end-market orders running low, most enterprises are procuring strictly on an “as-needed” basis; consequently, the inventory replenishment observed at month-end is largely a short-term phenomenon and is unlikely to generate sustained demand momentum.
Market Outlook:
In the short term, propylene glycol prices are expected to remain volatile. Market participants should closely monitor trends in propylene oxide prices, inventory replenishment activities among downstream sectors, and whether anticipated supply contractions—resulting from maintenance shutdowns at certain production facilities—actually materialize.
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