【 Introduction 】 Due to the combination of high international energy prices, force majeure of overseas installations and the increase of USD-CNY exchange rate, China’s propylene glycol export orders increased significantly from April to May, so the domestic propylene glycol prices showed an upward trend in May. Although the export market is better than the same period last year, but due to the early price has been in the process of decline, the current domestic propylene glycol price is still lower than the same period last year.
Export volume increased year on year, import volume decreased year on year
In April, China exported 14554 tons of propylene glycol, down 10.96% from the previous month and up 4.49% year on year. From January to April, the accumulated exports were 59,389.9 tons, up 42.18% year on year. In addition to the increase in export quantity, the average price of Propylene glycol exported by China in 2022 was significantly higher than that of the same period last year, with only a slight decline in April.
In April, China imported 4189.66 tons of propylene glycol, 44.23% less than last month and 43.19% less than last year. From January to April, the total exports were 21,162.96 tons, down 16.83% year-on-year.
Foreign production costs are high and there is a supply gap
This year, international crude oil prices continue to rise, while the price of overseas natural gas doubled due to geographical reasons, so the cost of production of foreign installations under pressure, especially in Europe, this phenomenon is more prominent, there are varying degrees of gaps in the supply of some chemicals, can not be transported to other demand areas. At the same time, in April, a factory in the United States of propylene glycol due to the supply of raw materials declared force majeure, which intensified the international supply of tight situation, foreign investors have turned to China as the source of supply.
The price advantage of Propylene glycol in China appears
Of course, another reason why Chinese sourcing is a concern is the price advantage. Prices had been falling until May because of weak domestic demand in China. In terms of domestic price trends, prices in January-February 2022 were higher than the same period last year, and prices from March were lower than the same period in 2021. In addition to coincide with the increase of the USD-CNY exchange rate, the enthusiasm of domestic export traders to improve.
Shandong province is the domestic production capacity of propylene glycol, so most of the export sources from Shandong province. In April, Shandong accounted for 75.81 percent of the total exports, followed by Zhejiang province with 8.72 percent and Jiangsu Province with 1.5 percent.
Exports are the main driver of domestic prices in the short run
In terms of the reasons for the increase in domestic prices in May, export is the main driving force. Export orders eased sales pressure on domestic factories and boosted market confidence. In the short term, the export market is still the main factor of domestic market volatility.