Market and product

China’s domestic propylene oxide (PO) prices are expected to be stable-to-soft amid tepid demand despite rising raw material prices, as Shandong-based producers are still generating reasonable margins, industry sources said on Monday.

On 16 December, average domestic PO prices slipped by yuan (CNY) 100/tonne to CNY10,325/tonne ($1,483/tonne) DEL (delivered), according to ICIS data.

Prices will likely be weighed down in the coming weeks by weak demand from the downstream polyols sector.

Most foam makers – the downstream of polyols – have yet to ramp up production following the surge in the domestic prices of other feedstock toluene di-isocyanate (TDI) in October, market sources said.

Polyols and TDI are the two main components used in the production of polyurethane (PU) foam.

Average spot import PO prices rose by $25/tonne week on week to $1,250/tonne CFR (cost & freight) China on 16 December, ICIS data showed. - ICIS