Three factors push up the propylene glycol market

On several trading days after the National Day, the domestic production price of propylene glycol rose by more than 1,000 yuan (ton price, the same below), with an increase of more than 10%. On the last trading day of September, the ex-factory price of propylene glycol remained at 9800 to 9900 yuan, and it has now reached 11,000 yuan. Even so, some factories have expressed their reluctance to sell at current prices. What caused the "quiet" propylene glycol to be so prosperous? The author believes that there are three main factors:

The first is the price increase of related products. In the last trading day of September, the price of DEG Jiangsu market was around 10,200 yuan, and it has now risen to around 11,000 yuan. Due to the existence of a certain supply gap in the market, combined with higher costs and hype factors, the overall performance of the diethylene glycol market has been booming this year. The difference between ethylene glycol and its related products is getting wider and wider, while the price of propylene glycol is getting closer and closer. It's basically flat. It can be considered that the drastic increase in diethylene glycol is the main driver of the bull market of propylene glycol.

The second is the support of the rebound of the upstream raw material market. The main raw material propylene oxide rebounded after the holiday, making propylene glycol cost support stronger. Due to environmental protection factors, before the National Day holiday, the Shandong propylene oxide company Dongchen and Shida Shenghua stopped. After the holiday, the market supply was tight. Coupled with the increase in commodity prices, the price of propylene oxide quickly entered the upstream channel. The pre-holiday price of propylene oxide in Shandong Province was around 12,200 yuan, and it has now risen to 12,600 to 12,700 yuan. It should be said that higher costs provide a strong backing for propylene glycol.

Third, the low stocks lead to tight supply. Propylene glycol is the main producing area in Shandong with better inventory control. Before the National Day holiday, the inventory of each factory is relatively low. After the opening of the holiday, it is driven by diethylene glycol. The inventory is quickly digested during the holiday season and the overall supply is low. In terms of operating rate, no parking equipment was restarted during the holiday season, and another set of production equipment was parked.

The above three points led to a strong performance of the propylene glycol market after the holiday. At present, the industry is still optimistic about the expectations of diethylene glycol, some factories continue to be optimistic about the market outlook and show reluctant to sell mentality. Behind the high price of domestic propylene glycol, the profit-making party is a middleman and factory. As far as the downstream unsaturated resins are concerned, since the main raw materials ethylene glycol, diethylene glycol, and styrene all increase, and considering the high level operation of maleic anhydride and propylene glycol, the cost also rises, but the downstream performance of terminals is generally low. Passing slower.

In general, domestically produced propylene glycol, despite its high price, there is no lack of cautious intentions among middlemen and downstream investors. The current three-fold positive support is good in the short term, and there is no shortage of propylene glycol in the market afterwards. However, at the same time as it is moving higher, it is still necessary to pay close attention to the risk conversion of the above three factors.