The Urethane Blog

Chinese Propylene Oxide Overview

China domestic PO prices seen stable-to-soft amid sluggish demand

19 December 2016 03:34 Source:ICIS News
bed 19 December

SINGAPORE (ICIS)–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.

Top photo: Propylene oxide (PO) goes into the production of polyols, a raw material for polyurethane foam, which is used in beds and other furniture.

($1 = CNY6.96)