2022 was a relatively tough year for propylene oxide. Since March, when it was hit again by the new crown, most of the markets for chemical products have been sluggish under the influence of the epidemic in various regions. This year, there are still many variables in the market. With the launch of new domestic production capacity, the contradictions in the supply and demand pattern of propylene oxide became increasingly prominent, facing greater pressure and challenges, and the balance pattern of the domestic north-south market was broken, followed by poor downward conduction of the terminal, and the market pressure once dropped to the lowest point at the end of the year.

PO in Shandong region in the past four years can be seen from the monthly average price comparison chart, in the first three quarters of 2022, the price operation range of propylene oxide was significantly lower than previous years, and August-September was the lowest month in the year. The overall boom of the terminal is low, new production capacity is released one after another, and the market supply and demand game is more frequent. Price control is mostly controlled by the downstream, and the pricing power of suppliers is gradually weakening. As a result, the domestic monthly average price is lower than in 2021.

Specifically, the highest monthly average price in 2022 was in March, with an average price of RMB 11,680/ton, and the lowest was in July, with an average price of RMB 8,806/ton. In March, the oil price once rose to USD 105/barrel due to the Russia-Ukraine war. After the sharp rise in international oil prices, acrylic acid prices once rose to RMB 9,250/ton, and liquid chlorine was also at a high level with strong cost support. Under its influence, operators were more cautious. In addition, supplier installations had an impact on parking and load shedding. in July, the main reason was the loss of the 8000 mark for domestic propylene oxide, and a new annual low of 7900 yuan/ton for propylene oxide in Shandong market. Downstream need to follow up during the month. In the market continues to follow up on the downside. In the market continued downward, the downstream market trading cautiously short, mostly relying on raw materials and supplier device fluctuations to support. Towards the end of the month, a small increase was influenced by demand.

The overall profitability of Cipro in 2022 was lower than in previous years, with factory profits empty for the year and theoretical profit losses of 300 yuan to 2,800 yuan/ton for the chlor-alcohol method, with an average profit of 481 yuan/ton in October. As can be seen from the chart above, the highest point was February. After the Spring Festival, affected by the supply of raw materials and environmental protection factors, the overall opening of the northern cyclopropane device down to 81%, some devices in East China in early March there is news of maintenance, the overall market atmosphere is good; in the first working day after the end of demand, part of the polyether trade links and end customers in advance of replenishment, polyether order volume short, supply and demand favorable PO market to achieve the door red up. Mid-month Jinling Dongying chlor-alkali device parking, PO equipment in a short period of time reduced to half-load operation, which is a good addition, PO11800-11900 yuan / ton, the monthly high point profit reached 3175 yuan / ton. The lowest point was mid-May. The main reason is that the raw material end propylene and liquid chlorine show a double up trend, cost support Yu strong. In addition, suppliers Jishen, Sanyue, Binhua and Huatai have reduced load/stopping and site supply. Superimposed on the downstream polyether holiday, short-term start, downstream purchasing sentiment gradually rise. Although suppliers report lower prices, but the rate of increase is lower than the cost, the region’s cost surface upside down, the lowest point this month is a negative profit of 778 yuan / ton.