850,000 tons of new production capacity is about to be put into operation The price of propylene oxide fell and enterprises reduced production and insured prices

Propylene oxide, which caused a large-scale reduction in production due to the European energy crisis in September, has attracted much attention
from the capital market.
However, since October, the attention of propylene oxide has declined, the price has risen and fallen recently, and corporate profits have fallen significantly
.

As of October 31, the mainstream price of propylene oxide in Shandong is 9000-9100 yuan / ton ex ex-shipment, and the mainstream price of propylene oxide in East China is 9250-9450 yuan / ton, the lowest point
since September.

Chen Xiaohan, an analyst at Longzhong Information Industry, said that at present, due to the weak demand for terminal white goods and insulation materials, the price of propylene oxide has no upward momentum; Although Europe has reduced production on a large scale, China has no policy support such as tax rebates for propylene oxide, and the price has no advantage, so there has been no significant increase in propylene oxide exports since September, and the profits of propylene oxide enterprises have also been greatly compressed
after the price has retreated.

At present, the downstream weakness of propylene oxide continues, and the traditional peak season "gold nine silver ten" orders do not increase but decrease
.
Among them, polyether orders are deserted, and it is difficult to have centralized procurement in a short period of time only moderately stocking to prevent epidemic risks; Orders for propylene glycol are limited, and dimethyl carbonate pending the commissioning of new plants is generally sold; Alcohol ether industry is stable and sorted; End customers such as sponge also quickly reduced
orders after a small amount of replenishment last week.

Some relevant enterprises said that last year's supply of propylene oxide products was in short supply, mainly because of the surge in terminal white goods demand because of the epidemic, but this demand can not be sustained, this year's propylene oxide orders decline is more obvious, the downstream polyether industry is already in a state of overcapacity, so after the terminal demand has dropped significantly, the demand for polyether raw materials has fallen faster
.
What makes the industry enterprises more pressured is that last year because of the high profit and high efficiency of propylene oxide, many large chemical enterprises launched a lot of propylene oxide equipment, once the new capacity is put into production, new products will definitely have a greater impact
on the price of propylene oxide in the short term.

The person also revealed that the enterprises that currently have new production capacity put into operation in November include Qi Xiang Tengda (002408.
SZ), CITIC Guoan (000839.
SZ), Jincheng Petrochemical and Tianjin Petrochemical, with a total new production capacity of 850,000 tons/year
.
Originally, some of these production capacities were started before November, but due to the sluggish price of propylene oxide, it was postponed to November, but according to the current situation, if all new production capacity is put into operation in November, the supply pressure on the entire industry is still relatively large
.

Faced with this situation, many enterprises that are currently maintaining production, because profits are constantly being compressed, choose to reduce production and insure prices
.
As of last week, Jilin Shenhua and Hongbaoli (002165.
SZ) continued to stop the state, Shandong Huatai successively stopped maintenance, Shandong Jinling, Zhenhai Refinery Phase 2 plan to reduce negative operation, the overall operating rate of propylene oxide dropped to around 73.
11%, which is 12 percentage points
lower than the normal operating rate of 85% in previous years.

Some insiders said that the current price of about 9,000 yuan, many new process propylene oxide enterprises have almost no profit, or even loss production, the traditional chlorine alcohol method due to the liquid chlorine price discount slightly thin profit, but the downstream is weak, product supply exceeds demand, so that propylene oxide enterprises are more embarrassed, especially last year added new environmental protection production capacity enterprises
。 At present, in the case that the product price is very close to the cost line, propylene oxide enterprises have a certain willingness to raise prices, but due to the control of public health events in many places, market demand is still difficult to support, such as follow-up continuous pressure, propylene oxide or continuous production reduction, reduce pressure, but once the new production capacity is concentrated to start supply, then the price of propylene oxide may be greatly impacted
.