In the second half of January 2026, the overall performance of Shandong propylene glycol market was weak, with a V-shaped trend of first deep decline and then weak rebound. The core of the market downturn is dominated by three factors: weakened raw material costs, sustained weak demand, and supply pressure. After losing key support, prices accelerated their bottoming out and hit a historic low; The continuous decline in prices has driven some companies to increase their shipments slightly, coupled with the marginal stabilization transmission on the cost side. After the market reduced inventory, there was a tentative small increase, but the overall weak atmosphere has not been reversed due to the lack of demand.
According to the Commodity Market Analysis System of Shengyi Society, as of January 29th, the average production price of propylene glycol in Shandong Province was 5933 yuan/ton, a decrease of 1.39% during the period.
Analysis of Core Driving Factors
Supply side: Loose supply becomes normal, pressure persists
Recently, the operating rate of the propylene glycol plant in Shandong has fluctuated narrowly, with an average operating rate of around 73%. The overall supply is sufficient, and the market circulation of goods is abundant. As the Spring Festival holiday approaches, some factories plan to arrange maintenance or reduce production in advance, resulting in a slight decrease in supply. However, this will only alleviate short-term pressure and cannot reverse the overall oversupply situation. It is necessary to continue to monitor the actual operation of the top enterprises’ equipment.
Demand side: Lack of essential needs and insufficient downstream support
The downstream demand for propylene glycol is concentrated in the fields of unsaturated polyester resin, coatings, and polyether. Currently, it is in the traditional seasonal off-season, and the operating rate of the unsaturated polyester resin industry is less than 40%. Enterprises mainly focus on digesting inventory, and their willingness to purchase in bulk is low; There has been no significant rebound in downstream demand for coatings, polyethers, and other products, and only sporadic restocking has been maintained for essential needs. Although there has been a slight increase in the export market, Southeast Asian buyers have a strong willingness to lower prices and tend to lock in low-priced sources, making it difficult to drive overall domestic prices up. The demand side has no driving effect on the market.
Cost side: Weakening of core raw materials, complete collapse of cost support
Epoxy propane is the core raw material of propylene glycol, accounting for up to 70% -85% of the cost, and its price fluctuations directly determine the bottom line of propylene glycol cost. In the first half of January, epoxy propane briefly rose and then quickly fell back. On January 29th, the benchmark price of Shengyi Society fell to 8200 yuan/ton, a decrease of 5.02% during the cycle, and the cost support strength significantly weakened; Moreover, many leading companies in the propylene glycol industry are equipped with epoxy propane units, with a self-sufficiency rate of over 80% in raw materials. The lack of cost advantages in outsourcing further exacerbates the downward pressure on prices.
Market outlook in the later stage
As the Spring Festival holiday approaches, companies are gradually suspending work and taking a break. The stocking cycle has basically come to an end, with only sporadic replenishment of inventory at the terminal, without any incremental demand support. Many operators are mainly reducing inventory and collecting payments, and the market is highly cautious. The expected low-level fluctuation of propylene glycol before the holiday is the main tone, and attention should be paid to the supply situation of equipment in the market.
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