The Urethane Blog

Chinese Polyol Update

2016 H1 Polyols and Automobile Market Analysis
2016-07-25    [Source:PUdaily]

PUdaily, Shanghai-Polyether polyols prices run with frequently fluctuations in the first half of 2016 and are offered averagely at RMB 8,703/ton at end June, compared with RMB 8,607/ton an the beginning of the year, up by RMB 96/ton. Early Janurary, polyols marekt goes down dramatically on the back of propylene oxide price decrement and weakening terminal demand. Most downstream sponge manufacturers maintain low operating ratios because of Spring Festival. Then polyols marekt moves upward sharply from the end of Janurary to March on account of increasing new orders from downstream users to get replenishment. Polyols market trend keeps in line with propylene oxide market in Q2 and there are limited orders heard in June amid the slack season and market atmosphere is sligguish now.

Polyols supply in China will continue going up in line with Wanhua, Jishen, CNOOC and shell’s new plants. Nevertheless, terminal demand may keep tepid in the future amid China Economy New Normal and overcapacity being key word of China polyols market. The reasons why some producers keen to invest new polyols plants are mainly due to more considerable profit margin compared to other chemicals. On one hand, some propylene oxide suppliers want to build new polyols plants to improve industry chain and cost advantage; on the other hand, some basic polyols manufacturers may get higher profit margin through developing special polyols. Besides, some major overseas suppliers will carry on increasing investment to Chinese market, which will also give pressure to domestic polyols suppliers.


China polyols import and export are 195,600 tons and 244,400 tons from January to May in 2016, up by 74% and 81% year on year respectively. It is expected that China polyols import and export will be 50,900 ton and 57,600 ton in June separately. Most major overseas polyols suppliers pay more attention to China market and boosting export to China. Meanwhile, domestic polyols producers set their sight on overseas market such as India, Turkey, Pakistan, Iran, Southeast Asian countries, Korea and Chinese Taiwan to digest overcapacity. The export of China polyols will continue to move up with the enlargement of domestic polyols capacity and the increment of pressure of overcapacity..


China automobile output and sale from January to June are 12.89 million and 12.83 million respectively, up by 6.47% and 8.14% year on year mainly due to steady economic development in China and increasing number of cars per capita. China automobile industry has established a mature industrial system after decades of rapid development. However, there are still gaps compared with developed countries.


China automobile industry develops with medium speed amid China New Normal in recent years. Nevertheless, new energy vehicles grow up at high speed on account of national policy and environmental protection. Sales of China new energy vehicles from January to June increase by 126.9% year on year.

Editor: Andrew