Since the beginning of October, frequent production disruptions at domestic propylene chloride plants have continued to tighten market supply. Supported by relatively firm downstream demand, market prices have risen in successive steps. As of October 22, the average market price of propylene chloride in Shandong stood at RMB 10,000/ton, up 5.26% from the same period last week.

The latest price increases have been driven primarily by tightening supply, while relatively high raw material costs have provided additional support and helped sustain market prices.

I. Cost Analysis: Raw Material Prices Decline, but Cost Support Remains

During this period, prices of the key raw materials, propylene and liquid chlorine, fluctuated downward. Nevertheless, their overall price levels remained relatively high, keeping production costs elevated and limiting the downside potential for propylene chloride prices.

As a result, despite the recent softening in raw material prices, cost-side support has remained in place, providing a solid foundation for the current market trend.

II. Supply and Demand: Tightening Supply Meets Stable Downstream Demand

1. Supply Side: Maintenance Activities Restrict Market Availability

Production disruptions caused by plant maintenance have continued to constrain domestic supply. Among the plants previously undergoing maintenance, only Shandong Sanyue had resumed production, while most other facilities remained under maintenance or operated at reduced capacity. In addition, maintenance at Yangji's 20,000-ton/year facility further tightened market availability.

According to statistics from Longzhong Information, domestic output from October 19 to 22 totaled 5,600 tons, down 1,000 tons from the previous period. This decline highlights the continued impact of production disruptions on overall supply.

With spot availability becoming increasingly limited, some market participants have shown greater reluctance to sell, while traders have maintained firm offers. These factors have further reinforced the upward pressure on market prices.

2. Demand Side: Stable Operating Rates Provide Support

Epichlorohydrin is a key downstream product of propylene chloride. During the period under review, operating rates at downstream plants using different production processes remained generally stable, with no significant changes observed at propylene-based and hydrogen peroxide-based epichlorohydrin facilities.

Other downstream sectors also maintained relatively normal purchasing activity. Overall, demand has continued to provide a degree of support through essential procurement. However, the market has yet to see a substantial increase in buying interest or strong demand-driven upward momentum.

III. Market Outlook: Prices Expected to Remain Relatively Stable

Looking ahead, the expected resumption of production at Binhua and Yangji following maintenance may gradually ease current supply tightness, potentially weakening the supply-side support for prices.

Meanwhile, downstream demand has not shown clear signs of significant deterioration, and essential purchasing is expected to continue providing a degree of market support.

Overall, the propylene chloride market is likely to remain relatively stable in the short term, with significant price fluctuations appearing less likely under the current supply-demand conditions.

Market participants should closely monitor the actual restart schedules of maintenance-affected plants, changes in domestic production levels, and operating rates and purchasing activity in the downstream epichlorohydrin sector, as these factors will play a key role in determining future price movements.