Can The Recovery of The Raw Material Market Drive The PolyetherPolyol Market

Recently, driven by international crude oil prices, propylene prices, which had fallen to a low point in the previous period, began to rebound. The rebound of propylene makes the previous price all the way down PO, PolyetherPolyol (PPG) gradually show a stable market. But can the market price also rebound with the same raw materials?

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First of all, look at the raw materials. Although propylene prices have been rebounding to some extent. But the overall demand for polypropylene and propylene oxide is still sluggish. Therefore, in the absence of downstream demand support, propylene prices are unlikely to rise significantly.

Similarly, from the perspective of propylene oxide market. Due to the recent sluggish demand of downstream polyether, coupled with the abundant supply of imported and domestic sources of propylene oxide. Therefore, under the mutual constraint of propylene and demand, the future price of propylene oxide is unlikely to rise significantly.

Soft foam PPG: The export of soft foam furniture is hampered by the international financial situation and the euro crisis, and the order quantity has dropped significantly. Domestic demand, by the impact of the housing market control policy, the overall sales situation is also very unpromising. Then the decline in sales and orders of upholstered furniture, which directly led to a large reduction in demand for sponge factory. This for soft foam polyether demand is shrinking trend.

Automotive industry, from the recent automotive industry survey data, the beginning of the second quarter, the inventory of the automotive factories is a significant increase in the trend. In April, the production of 1,598,000 units of various types of cars fell by 8.6% compared to March. The reduction in production of the automotive industry will directly lead to the automotive cushion industry demand for high resilience PolyetherPolyol and other reduced trend.

Hard foam PPG: refrigerator, freezer industry overall start situation although still maintain a good trend, but also gradually into the production of off-season. However, from the specific refrigerator and freezer factory response, the rapid growth brought by home appliances to the countryside this year may gradually enter a period of decline. Small and medium-sized refrigerators and freezers factory start rate is obviously less than the early.

Building insulation industry, although the growth of the building insulation industry or remain relatively stable, but because of the relatively small market size, and can not directly drive the demand for rigid foam PPG substantial growth.

Finally we come to polyether production capacity issues. This year in the polyether enterprises to expand production and new projects for the most years of the year. According to statistics, in 2030, more than 50-60 million polyether expansion and new projects will be put into operation. 2030, the total domestic polyether production capacity will reach a staggering 2.8 million tons, in the downstream as a whole to maintain the downturn, the problem of excess capacity will be the biggest problem in the next period of time plagued the domestic PPG enterprises.

So the future of the PPG market in raw materials, demand and capacity constraints in three areas will be difficult to do something, the rebound in raw material prices can only form a certain support for PPG, market prices will have some recovery, but the possibility of a significant increase is unlikely.