For the Quarter Ending September 2024
North America
The third quarter of 2024 has been marked by higher price increases displaying a mixed trend in the Propylene Oxide market in North America, with the USA experiencing the most notable changes. Various factors have contributed to this uptrend. The surge in demand for polyol products, driven by applications in construction chemicals and automotive sectors, has propelled prices upwards. Supply constraints, including plant shutdowns and disruptions caused by natural disasters like Hurricane Beryl, have further tightened the market, supporting price hikes. Additionally, the stability in propylene prices and increased conversion rates to propylene oxide have added to the price escalation.
In the USA specifically, the market has witnessed a consistent upward trend in Propylene Oxide prices throughout the quarter. Seasonal influences, such as increased demand for polyols during the summer months, have also played a role in driving prices higher. Compared to the same quarter last year, prices assessed at the September end have surged by 8%, showcasing significant growth in the market, driven primarily by higher propylene prices. Moreover, the quarter-on-quarter increase of 4% indicates sustained bullish sentiment.
The price comparison between the first and second half of the quarter reveals a 3% price increase, culminating in the latest quarter-ending price of USD 1675/MT for Propylene Oxide FOB Louisiana in the USA. This quarter has demonstrated a positive pricing environment for Propylene Oxide, characterized by consistent and substantial price growth.
Asia Pacific
In Q3 2024, the APAC region witnessed a significant decline in Propylene Oxide prices, with Japan experiencing the most notable price fluctuations. This quarter has been characterized by a multitude of factors influencing market prices. Oversupply of Propylene Oxide, coupled with weakening demand in downstream industries, has led to a negative pricing environment. The prices at the end of September dropped 14% over the prices of the previous year, assessed for the last week of September. In comparison to the previous quarter, the marginal 4% indicating a bearish trend. The first half saw relatively stable prices with prices peaking in the early days of August followed by bearish movement as freight charges and weaker propylene prices, highlighting a shift towards lower prices. Notably, the quarter-ending price of USD 1025/MT for Propylene Oxide FOB Osaka in Japan signifies the overall decreasing sentiment prevailing in the market. Seasonality and market dynamics have played a pivotal role in driving prices down, with the pricing environment predominantly negative throughout the quarter. Along with seasonality, falling margins and weaker demand in major end-use like polyurethanes, unsaturated polyesters as well as cosmetics also kept the market bearish overall.
Europe
Propylene Oxide prices in the Europe region during the third quarter of 2024 have experienced a mixed trend. with. Year on Year comparison with the previous year’s September’s last assessed price revealed a drop of 19% in prices partially due to falling energy prices and weaker propylene prices due to lower demand of PP. The main factors influencing market prices include overproduction, higher supply levels, and lower demand in key sectors such as construction and consumer goods. These conditions have led to bearish market sentiment, with prices falling steadily throughout the quarter. In the Netherlands, which has seen the most significant price changes, the correlation between market trends and price fluctuations has been pronounced. The prices dropped by 5% throughout the quarter cumulatively while the prices peaked twice due to supply disruptions. In conclusion, the latest quarter-ending price of USD 1380/MT for Propylene Oxide FOB Rotterdam in the Netherlands reflects the overall negative pricing environment experienced in the region during Q3 2024.
For the Quarter Ending June 2024
North America
In the second quarter of 2024, the North American propylene oxide market has experienced a complex interplay of factors, leading to significant price fluctuations. The quarter commenced with a steady rise in propylene oxide prices, largely driven by upstream propylene costs and robust downstream demand for polyols and propylene glycol (PG). Propylene prices surged due to supply constraints, exacerbated by geopolitical tensions and scheduled refinery maintenance, which in turn elevated the cost of production for propylene oxide. Additionally, the anticipation of tropical hurricanes added a speculative premium to feedstock prices, further tightening market conditions.
In the USA, where the price changes were most pronounced, the market saw a notable trend of increasing prices. The second quarter observed cumulative price rise of 3%. The price generally remained stable relatively with minor fluctuations owing to feedstock propylene prices fluctuating throughout the quarter, while the surge in prices was observed in the last month of the quarter aided by peaking of shipping prices. This increase was attributed to stronger-than-expected demand recovery in the automotive and construction sectors, coupled with seasonal upticks in polyol consumption driven by the onset of summer.
Overall, the pricing environment for propylene oxide in the USA has been positive, underpinned by resilient demand and constrained supply. The quarter concluded with propylene oxide prices at USD 1610/MT FOB Louisiana, reflecting a consistent upward momentum. The market sentiment remains bullish, supported by ongoing demand recovery and feedstock price pressures, positioning propylene oxide firmly on an upward pricing trajectory in the North American region.
Europe
During Q2 2024, the Propylene Oxide (PO) market in Europe experienced a mixed trend which largely tended towards weak pricing environment, however periods of moderate recovery was also observed. The decline in prices was predominantly driven by a convergence of several factors. Among these, oversupply remained a critical issue, exacerbated by high inventory levels and weak demand from downstream polyol producers. Crude oil price fluctuations also played a role, with Brent crude's surge to USD 87/MT impacting the feedstock propylene prices, resulting in cost pressures that downstream markets struggled to absorb. Additionally, bearish sentiment was sustained by subdued activity in the construction sector, further dampened by adverse weather conditions that affected construction permits and overall demand. Focusing on Germany, which witnessed the most significant price changes, the overall trend was consistently downward throughout the quarter. Seasonality factors, such as lower demand during the early summer months, coupled with operational constraints due to floods in the Rhine valley, further accentuated the price drop. The correlation between high inventory levels and deflationary pressures was evident as manufacturers faced challenges in adjusting production to match the tepid market demand. Throughout the quarter, the prices cumulatively fell by 9.4%. However, the period of May saw price peaking again due to speculative orders being put amidst Rhine valley flooding. The quarter concluded with the price of Propylene Oxide FOB Hamburg at USD 1540/MT, encapsulating the overall negative pricing environment. The prevailing market conditions suggest that the pricing environment remained unfavorable, characterized by a consistent downward pressure on prices.
Asia Pacific
In Q2 2024, the Propylene Oxide (PO) market in the APAC region has experienced mixed price adjustments, driven by a confluence of factors that underscored market dynamics. The quarter has been defined by an interplay of supply constraints, currency fluctuations, and strong downstream demand from polyol industries, including automotive, construction, and personal care sectors. The closure and maintenance of key production facilities exacerbated the supply crunch, while bullish propylene markets transferred cost pressures down the value chain, leading to elevated PO prices. Increased freight costs and logistical challenges further intensified the upward pricing trend, as suppliers faced elevated premiums and reduced tanker availability. Japan, in particular, witnessed pronounced price changes, reflecting the most significant volatility in the region. The Japanese PO market saw an overall price increase of 3% throughout the quarter, with the prices bottoming occurring in the first week of May followed by a period of stability. This stability in the face of broader market fluctuations underscores the balancing act between supply constraints and moderate demand pressures. Seasonal factors, such as pre-monsoon stocking and summer demand for downstream applications, played a pivotal role in sustaining the price momentum. The prices began surging by for the last month of quarter as quarter end stocking approached its end and the major routes of APAC-US and APAC-Europe remained highly packed for deliveries lined up. The latest quarter-ending price for Propylene Oxide FOB Osaka stood at USD 1065/MT, marking the culmination of a quarter characterized by a stable yet upward price trajectory. Overall, the pricing environment for Propylene Oxide in Japan has been stable with a positive bias, driven by strategic supply management and robust downstream demand, offsetting broader market adversities.
For the Quarter Ending March 2024
North America
Propylene Oxide prices in the first quarter of 2024 observed bullish sentiments in North American region owing to a newer contract for supplies coming into effect. January production and newer deliveries of gas and propane in North America deliveries saw significant deflation over previous contracts which has led to increase in cracker spread margins and downstream propylene and propylene oxide production. Propylene Oxide prices turned strongly bullish as demand improved in North America, with spot markets following the contract pricing movements, spot markets showed rigorous buying activities as downturns eased with pending orders slowing down due to higher utilization and production, especially USA. Consumption demand remained subdued for propylene oxide derivatives as Winter slump intensified with Mexican demand slowing, though inventories in North America remained on the higher end.
The month of February saw upward price revisions as temperatures improved with downturns easing. Spot markets saw significant inventory building activities with US FOB Louisiana quotations going up by USD 120/MT in certain spot deliveries to China Lunar New Year began its commencement coupled with supply disruption due to tanker shortages continuing in APAC region. Demand for propylene glycol and other polyols increased as inventory expansion in certain isocyanates market intensified. Furthermore, cosmetics and consumer markets continue to recover as business and consumer confidence continues to improve as service sectors growth offset slump in manufacturing in 2023.
Overall, the pricing environment for Propylene Oxide in the North American region during Q1 2024 has been positive, with prices increasing. This is reflected in the percentage change from the same quarter last year, which stands at -11% as demand slump continued into the first quarter of 2024.
Europe
The first quarter of 2024 observed bullish sentiments in European region owing to a newer contract for supplies coming into effect for propylene oxide prices. January production and newer deliveries of gas and propane in Europe deliveries saw significant deflation over previous contracts which has led to increase in cracker spread margins and downstream propylene and propylene oxide production. Propylene Oxide prices turned strongly bullish as demand improved in the Eurozone region, with spot markets following the contract pricing movements, spot markets showed rigorous buying activities as downturns eased with pending orders slowing down due to higher utilization and production, especially Belgium. Consumption demand remained subdued for propylene oxide derivatives as Winter slump intensified with Northern Europe observing high showers, railway strikes and protests, which had caused higher spot pricing while parts of Mediterranean and Southern Europe saw high production activities especially Italian markets.
The month of February saw upward price revisions as temperatures improved with downturns easing. Spot markets saw significant inventory building activities with German FOB Hamburg quotations going up by USD 50/MT in certain spot deliveries to China as Chinese Lunar New Year began its commencement coupled with supply disruption due to tanker shortages continuing in APAC region. Demand for propylene glycol and other polyols increased as inventory expansion in certain isocyanates market intensified. Furthermore, cosmetics and consumer markets continue to recover as business and consumer confidence continues to improve as service sectors growth offset slump in manufacturing in 2023.
Overall, the pricing environment for Propylene Oxide in the European region during Q1 2024 has been positive, with prices increasing. This is reflected in the percentage change from the same quarter last year, which stands at -11% as demand slump continued into the first quarter of 2024.
Asia Pacific
Propylene Oxide prices in the first quarter of 2024 observed mix sentiments in Asia-Pacific region owing to a newer contract for supplies coming into effect. January deliveries from Saudi and European deliveries saw significant downward price revisions for Asian deliveries as downturns and capacity utilization for propylene oxide supply turned stronger in European and Middle Eastern markets. Prices revised downwards to a tune of USD 100/MT in some deliveries, with spot markets following the contract pricing movements, spot markets for January remained subdued due to lower trading activities due to high inventories and weaker consumption as Winter progressed.
The month of February saw upward price revisions as temperatures increased in large parts of China, Korea and Japan with downturns easing. Spot markets saw significant inventory building activities with CFR Qingdao quotations going up in certain spot deliveries as Chinese Lunar New Year began its commencement coupled with supply disruption due to tanker shortages continuing in APAC region. Demand for propylene glycol and other polyols triggered the rise in spot prices as East Asia enlarged their inventories to cater to consumption demand led by China. The spot market turned dull again after the last week of February as Chinese markets came online with excess supply being destocked for the next two weeks, though propylene oxide consumption increased overall YoY basis, supply exceeded demand for New Year festivities. This was partially offset by pre-summer stocking especially seen in the propylene glycol inventories.
Overall, the pricing environment for Propylene Oxide in the APAC region during Q1 2024 has been positive, with prices increasing. This is reflected in the percentage change from the same quarter last year, which stands at -24% as demand slump continued into the first quarter of 2024.
For the Quarter Ending December 2023
North America
Prices of Propylene oxide showed mixed sentiment in Q4FY23 with stable prices in the month of October and falling prices till the end of quarter. Feedstock propylene largely provided negative cost coupled with weak energy prices in the given quarter amidst excellent US domestic crude and gas production and lower polypropylene demand.
Supply largely remained domestic. Construction related demand remained subdued with pending orders piling up although new procurement for Propylene oxide derived polyurethane showed uptick largely from commercial construction sector. Consumer demand, especially pharmaceuticals and bodycare, remained strong amidst resilient consumer spending and rising healthcare costs. Inflations Reductions Act driven sustainable energy transition policy in USA drove the polyurethane market to significant extent.
Residential Construction chemical markets are showing gradual signs of recovery with improving purchases for Propylene oxide derivatives, although the effect on prices remained weak. Automotive and Polymer markets remained other major drivers for propylene oxide derivatives volume. Asian markets continue to be the largest importers of Propylene oxide from North American markets Festivities and pent-up demand coupled with previous quarters delivery made the propylene oxide market strong in the current quarter. By the end of the quarter, prices started rising and rise in newer orders due to high CIF and CFR charges due to container and shipping shortages largely due to Panama and Suez Crisis.
Asia Pacific
Prices of Propylene oxide showed mixed sentiment in Q4FY23 with prices remaining stable in October and November and steeply falling prices in the month of December. Feedstock propylene prices largely provided negative cost coupled with weak energy prices in the given quarter amidst excellent US domestic crude and gas production and falling polypropylene demand amidst oversupply. Supply largely with substantial imports from Europe and North America. Construction related demand remained subdued with pending orders piling up although new procurement for Propylene oxide derived polyurethanes showed uptick largely from commercial construction sector. Consumer spending remained on the lower end amidst high financial debts marginally offset by uptick in Japan and India’s consumption. Demand for heat insulation and refurbishments continue to rise in Korean and Japanese markets amidst government approved schemes to transition into energy efficient complexes. Residential Construction chemical markets are showing gradual signs of recovery with improving purchases for Propylene oxide derivatives, although the effect on prices remained weak. Automotive and Polymer markets remained other major drivers for propylene oxide derivatives volume. Japan and Korean markets continued to be the largest suppliers of Propylene oxide to North American markets Festivities and pent-up demand coupled with previous quarters delivery made the propylene oxide market strong in the current quarter. By the end of the quarter, prices started stabilizing amidst falling newer orders due to high CIF and CFR charges due to container and shipping shortages largely due to Panama and Suez Crisis.
Europe
Prices of Propylene oxide showed mixed sentiment in Q4FY2 with prices showing price rise in the month of November largely owing to force majeure and stoppage of Repsol Quimica plant at Spain. Feedstock propylene largely provided negative cost coupled with weak energy prices in the given quarter amidst excellent US domestic crude and gas production and lower demand from PP markets. Supply remained largely domestic. Construction related demand remained subdued with pending orders piling up although new procurement for Propylene oxide derived polyurethanes showed uptick largely from commercial construction sector slowing down gradually by the end of quarter amidst strong winter and weakening of supply chain due to lower logistical capacities seasonally. Consumer demand, especially pharmaceuticals, remained subdued amidst weak consumer spending and rising healthcare costs while markets observed strong procurement in propylene oxide from cosmetic and body care segment largely which was later destocked in the month of December amidst disappointing festive sales. EU policy on transition to sustainable energy continues to drive the polyurethane market to significant extent. Residential Construction chemical markets are showing gradual signs of recovery with improving purchases for Propylene oxide derivatives, although the effect on prices remained weak in Netherlands, Italy and UK. Automotive and Polymer markets remained other major drivers for propylene oxide derivatives volume. China, Japan and Korean markets continued to be the largest importers of Propylene oxide by European supplies. Festivities and pent-up demand coupled with previous quarters delivery made the propylene oxide relatively strong in the current quarter despite setbacks from high interest rates. By the end of the quarter, prices started pulling amidst rise in newer orders due to high CIF and CFR charges due to container and shipping shortages largely due to Panama and Suez Crisis.
