Propylene oxide (PO) prices stayed low globally in March 2025, held down by weak demand from downstream users, cheaper feedstock, and oversupply. Although market sentiment stayed weak, prices may find support in Q2 as seasonal demand improves and planned plant shutdowns reduce supply.

In March, the European PO market faced considerable headwinds. Demand from downstream sectors, especially polyether polyols and polyurethane, remained weak. Trading activity was limited, with small orders dominating as buyers avoided bulk procurement. Sluggish auto production and slow industrial recovery across the region contributed to soft consumption.

LyondellBasell and Covestro shutting down their PO11 unit in Maasvlakte, Netherlands, added to the story. The closure, caused by oversupply in the global market, high energy bills, and slim profits, cut 315,000 tons of yearly PO capacity. But it wasn’t enough to lift the weak demand.

Europe’s chemical makers faced tough times. In March 2025, the industry was called “in crisis,” hit by sky-high energy costs, slipping competitiveness, and growing trade walls. Market participants expected policy help to stop more shutdowns and job cuts.

Germany and the UK reflected these struggles. New factory orders continued to decline, while external demand remained muted. European export sales fell again in March, further limiting PO shipment volumes. Despite tightening supply in select regions, overall pricing and sentiment stayed bearish.

In the U.S., PO demand was soft in March. Housing starts perked up early, but falling permits and completions hinted at a shaky construction future. The downstream sectors such as polyurethane for insulation, foams, and coatings stayed quiet.

LyondellBasell also closed its PO/SM plant in Channelview, Texas, as part of wider supply adjustments. Still, supply was enough to meet needs, and with demand staying low, prices didn’t see much change.

Asia's PO market was no exception to the global trend. China saw soft demand from polyether polyols and polyurethane industries, with converters largely adopting a wait-and-see approach. Domestic supply remained ample, with local shipments priced competitively. Meanwhile, Ramadan dampened petrochemical trade in Southeast Asia and the Middle East throughout March, slowing PO offtake.

Feedstock propylene prices eased in parts of Asia due to sufficient supply further reducing the production of PO. Many buyers adopted a “wait and watch” strategy, while downstream manufacturers found domestic shipments more convenient and competitively priced, further weakening import demand.

As per the ChemAnalyst data, PO prices may find support in Q2 as seasonal demand improves and supply tightens. Meanwhile, post-Ramadan trade rebound and recovering end-user activity could gradually lift market sentiment across key regions.