Polyol Prices Rise in China

PUdaily, Shanghai– On October 6, when people were still spending the National Day holiday, news that polyether-polyols manufacturers would raise price came in. In the first, third, fourth, fifth and sixth day, the price was raised by 150, 100, 100, 200 and 200 RMB/ton respectively. The trend of price increase over the past several days can be described in the following histogram:

Figure 1: the cumulative price increase during and after the National Day holiday

We interviewed several industry insiders:

1. Why do you think the prices of polyether polyols and propylene oxide were raised?

“During the holiday, polyether polyols manufacturers received many orders and some of them even won large ones. However, their inventories became more strained after receiving these orders. And the raw materials for producing polyether polyols were in short supply.”

“I think the price was raised because downstream manufacturers needed to stock some inventories in preparation for the upcoming National Congress.”

2. It is heard that polyether polyols plants run short of acrylonitrile, right?

“Yes, acrylonitrile is in short supply”

“We also run short of propylene oxide.”

3. How long do you think this round of price increase will last?

“Probably it will go up gradually. The polyether polyols manufacturers are trying to control the rise to avoid panics among downstream manufacturer as a result of sharp price increase. So the price will probably stay as stable as possible.”

“In my opinion, this round of price increase will probably continue until the end of this month, just increase more slowly in later period.”
“It’s hard to say how it will go on. We’d better see how the market reacts in a few days.”

4. Do you think the downstream production will be affected in middle and late this month?

“There will be some restrictions on the transport of dangerous chemicals in Yangtze River area and Nanjing, but other restriction measures are barely heard. The restrictions will surely be introduced when the conference is held. Thus the transport of some raw materials such as propylene oxide is likely to be affected.”