The prospects for the propylene glycol industry are worrying

　　Since the beginning of this year, the domestic propylene glycol market as a whole has shown a volatile upward trend. According to the statistics of chemical industry online, taking the East China market as an example, the price of propylene glycol at the beginning of the year was 12,300 yuan (ton price, the same below), and after several rounds of rise, it rose to 18,500 yuan in late April, setting a record high. Due to the high price of propylene oxide raw materials, the profits of propylene glycol manufacturers are worrying, many enterprises are concentrated on stopping work and maintenance, and the market supply is greatly reduced, laying the foundation for the price of propylene glycol to rise. However, in May, as the price of raw materials fell widely, propylene glycol followed the downward adjustment, and the current market situation is deadlocked.

　　In the later stage, the overall supply of propylene glycol industry is oversupplied, and the market prospects are worrying.

　　From the supply point of view, at this stage, China's propylene glycol production to propylene glycol / dimethyl carbonate co-production process and propylene oxide water legally based, of which dimethyl carbonate / propylene glycol cogeneration process compared with propylene oxide water legal has a certain production cost advantage, the main production enterprises are concentrated in Shandong, Hebei, Liaoning and other provinces. According to statistics, as of the end of 2020, the domestic propylene glycol production capacity is about 520,000 tons, and the overcapacity is prominent, and there are fewer new projects in recent years.

　　From the demand point of view, propylene glycol is mainly used to produce unsaturated polyester, accounting for about 60% of total consumption. Affected by strict environmental protection investigations, the operating rate of the unsaturated resin industry has only remained about 50%, and many small resin factories have been shut down and banned, and the industry consolidation has intensified, and the operating rate is difficult to increase. Judging from the operation of this year, the operating rate of unsaturated resin enterprises is currently low, and small and medium-sized enterprises are in a state of opening and stopping, and the operating rate of large-scale enterprises is also 10% or 20% lower than in previous years. Under the low load operation, the overall profitability of the industry is still not high.

　　Soft foam polyether is the second largest downstream of propylene glycol, its terminal downstream sponge plant demand is limited, under the huge environmental pressure, sponge factory profits gradually shrink, the demand for polyether continues to be low, it is difficult to drive the raw material propylene glycol market.

　　In the case of domestic propylene glycol overcapacity, propylene glycol exports have exceeded imports for many years, and this trend continues. According to the data released by the customs, from January to May 2021, China's total propylene glycol exports were about 55,000 tons, a year-on-year decrease of 3.7%; Total imports were 29,000 tonnes, down 2.5% year-on-year. The relative decrease in the number of exports is mainly due to the fact that the domestic propylene glycol is in a relatively high price period, while the maritime aspect is also affected by the tight position, and the sea freight rate has soared, affecting the export profit. Although china's propylene glycol imports have declined slightly, high-end products still rely on imports, especially pharmaceutical-grade products with large market demand.

　　On the whole, the low-end surplus and high-end lack are the true portrayal of the domestic propylene glycol industry, and the downstream demand is difficult to boost, and the situation of market oversupply is becoming more and more obvious. For the long-term development of the propylene glycol industry, the resolution of overcapacity, the improvement of product quality and the development of new growth points for downstream demand are fundamental.