The Propylene Oxide market in Asia and Europe has experienced a price decline and sustained pressure throughout December 2024, primarily due to tepid downstream demand and cautious procurement activities.

In Asia, Propylene Oxide market sentiment was dampened despite a slight rise in feedstock propylene and chlorine prices in some regions, offering partial cost support. Propylene prices exhibited a mixed trend, gaining in parts of Northeast Asia while remaining stable elsewhere. This uplift was attributed to supply constraints and pre-holiday restocking activities in selective markets. However, downstream industries, particularly polyurethane, exhibited limited enthusiasm, resulting in subdued transaction volumes.

Propylene Oxide output has increased significantly following the restart of production facilities by key enterprises, including Jiangsu Yida, Satellite Petrochemical, and Ruiheng New Materials. Downstream industries continue to display sluggish demand due to seasonal factors, with procurement focused primarily on just-in-time requirements. Market activity remains subdued as cautious buying sentiment dominates, and actual order volumes stay limited. In APAC, weaker demand from sectors such as polyols and surfactants has further pressured market dynamics, reflecting the broader economic slowdown and lackluster industrial activity.

The Propylene Oxide market is facing headwinds from reduced downstream activity, compounded by cautious macroeconomic sentiment across APAC. Buyers remain hesitant to engage in bulk procurement, opting instead for limited purchasing strategies to mitigate risks associated with market volatility.

The Propylene Oxide market in Japan mirrors the broader APAC trend, with demand from downstream sectors like polyols and other downstream. Seasonal factors and limited industrial activity have constrained Propylene Oxide market momentum, while traders focus on maintaining balanced inventories in the face of weak buying interest.

In Europe, Propylene Oxide prices continued to face downward pressure, influenced by lackluster activity in the construction sector, a key end use market. High borrowing costs and inflationary pressures exacerbated the slowdown in residential and commercial projects, curbing demand for polyols and related products. Although the automotive sector provided some support with increased vehicle production and sales, this was insufficient to offset broader market weakness.

German producers maintained controlled production rates, aligning output with reduced demand. New production capacities across the global market exerted further downward pressure, prompting manufacturers to focus on inventory management to navigate low utilization rates.

In plant news, key feedstock facilities in Asia are preparing for maintenance shutdowns, which could impact regional supply dynamics in early 2025. CPC Corp’s No. 4 cracker in Taiwan and JG Summit Olefins’ cracker in the Philippines are slated for maintenance, potentially tightening propylene availability and influencing Propylene Oxide market outlook.

As per ChemAnalyst, Propylene Oxide prices are likely to remain weak in the short term. Increased production, coupled with cautious downstream procurement, suggests a continued wait-and-see approach.