According to the monitoring data of the business community, as of December 7, 2022, the reference average ex factory price of domestic industrial propylene glycol was 7766 yuan/ton, and on January 1, 2022 (the reference price of propylene glycol was 16400 yuan/ton), the price decreased by 8634 yuan/ton, or 52.64%.
In 2022, the domestic propylene glycol market experienced “three rises and three falls”, and each rise was followed by a more violent fall. The following is a detailed analysis of the propylene glycol market trend in 2022 from three stages:
Phase I (up and down 1.1-5.10 for the first time)
In January 2022, after the New Year’s Day holiday, propylene glycol plants in some parts of China will resume operation, the on-site supply of propylene glycol will increase, and the downstream demand will be insufficient. The propylene glycol market will fall under pressure, with a decline of 4.67% in January. After the Spring Festival in February, the stock of propylene glycol in the yard was low, and the downstream stores were reserved for the festival. Supported by supply and demand, propylene glycol rose to a high level on February 17, and the market price was around 16900 yuan/ton. It rose 12.37% in early February.
In the face of high prices, the wait-and-see mood in the lower reaches increased, the pace of stocking slowed down, and the propylene glycol inventory was under pressure. Since late February, the propylene glycol market started to run at a high level and fell. In March and April, due to special factors, downstream demand of propylene glycol continued to be weak, transportation in many places in China was limited, supply and demand circulation was slow, and the gravity of propylene glycol continued to decline. Until early May, the propylene glycol market had fallen for nearly 80 consecutive days. On May 10, the market price of propylene glycol was 11,116 yuan/ton, down 32.22% compared with the beginning of the year.
Phase II (the second rise and fall of 5.11-8.08)
Since the middle and late of May, the propylene glycol market has welcomed favorable support in terms of exports. With the increase of export orders, the overall supply pressure of propylene glycol in the field has eased, and the offer of propylene glycol factory has started to rise steadily. In June, the export advantage continues to support the upward focus of propylene glycol. On June 19, the propylene glycol market price was near 14133 yuan/ton, up 25.44% compared with May 11.
In late June, the propylene glycol export was calm, the domestic demand was generally supported, and the propylene glycol supply side was gradually under pressure. In addition, the raw material propylene oxide market declined, and the cost support was also loose. The propylene glycol market entered the downward channel again. Under the continuous negative pressure, the propylene glycol fell all the way down to the early August. On August 8, the propylene glycol market price fell to about 7366 yuan/ton, less than half of the market price at the beginning of the year, Compared with the beginning of the year, the decline has reached 55.08%.
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The third stage (the third rise and fall 8.09-12.07)
In the middle and late August, the propylene glycol market experienced a recovery from the trough. Export orders increased. The tight supply of propylene glycol and increased costs supported the upward movement of the propylene glycol market. On September 18, the propylene glycol market price was 10333 yuan/ton.
In the middle and late September, with the weakening of raw materials and the loosening of cost support, and after the propylene glycol price broke through 10000 yuan, the turnover of new orders turned weak, and the propylene glycol market price fell again. After the National Day, the “silver ten” was not seen, and the demand was insufficient. Under the pressure of the accumulated warehouse shipment at the supply side and the intensification of the supply and demand barrier, propylene glycol continued to bottom out. As of December 7, the propylene glycol market price reference was 7766 yuan/ton, with a decline of 52.64% in 2022.
Factors influencing propylene glycol market in 2022:
Demand: In 2022, the propylene glycol market will gradually decline from about 16400 yuan/ton at the beginning of the year to about 9500 yuan/ton in the middle of the year, and then to about 7700 yuan/ton in the fourth quarter. The propylene glycol market will continue to decline significantly. It is mainly affected by demand. The trading atmosphere in the downstream UPR market is general, and the overall terminal demand is slowly boosted, mainly for raw material procurement. After centralized delivery of export orders, the accumulated warehouse of propylene glycol factory was under pressure and began to yield profits for shipment, and the market price gradually fell deeply.
Exports: In 2022, the propylene glycol market experienced two sharp increases in early May and early August, which were mainly driven by exports.
In the first quarter of 2022, due to the influence of international factors, the export volume of domestic propylene glycol to the Russian Federation will decrease, which will also affect the overall export direction of propylene glycol in the first quarter. In May, the export supply of propylene glycol will resume, and the export orders will increase in May. In addition to the influence of force majeure factors of Dow devices in the United States, the supply will shrink, and the export will be favorable. The increase of export orders will drive the price of propylene glycol to rise.
According to the customs data, the export volume in May continued to hit a new high of 16600 tons, up 14.33% month on month. The average export price was 2002.18 dollars/ton, down 13.33% month on month. The export volume to Türkiye is the largest, 1779.4 tons. From January to May 2022, the cumulative export volume will be 76000 tons, up 37.90% year on year. The proportion of consumption reached 37.8%, and the increase of export volume was also the main reason for this rebound. With the delivery of export orders, the follow-up of new orders with high prices is limited. In addition, the domestic market demand is weak in the off-season. The overall high price falls back in the middle and late June, waiting for the next cycle of export orders.
In the middle of August, the propylene glycol factory delivered export orders again, and the factory goods were tight and reluctant to sell. The propylene glycol market hit the bottom and rebounded, ushering in a wave of rising prices again.
Propylene glycol market forecast and outlook in 2023
In the fourth quarter of 2022, the domestic propylene glycol production capacity is on the high side as a whole. Towards the end of the year, the situation of supply exceeding demand in the propylene glycol market is hard to change, and it is expected that the market situation is weak.
After 2023, in the early days of the Spring Festival, the propylene glycol market is expected to usher in a staged stock up, and the support of demand is expected to bring a wave of rising market prices to the market. After the Spring Festival, it is expected that the downstream will need time to digest raw materials, and the market will enter the consolidation and operation. Therefore, it is expected that in the first quarter of 2023, the domestic propylene glycol market will mostly underestimate the moderate recovery and then stabilize the consolidation and operation, and more attention should be paid to the changes in the information on the supply and demand side.
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