China Polyether Market Loses Upward Momentum as Seasonal Demand Weakens

Following a narrow decline in late November, China's polyether market recorded another uptick in early December. Although the increase was limited in magnitude, it stimulated a degree of rigid demand. Momentum subsequently weakened, yet amid prevailing bearish sentiment, several supportive factors continued to push prices higher. With the first half of the month now concluded, the upward trend is gradually losing strength.

Since early December, polyether prices have risen twice. As of the 15th, flexible foam polyether prices in North China and Shandong were quoted at 8,200–8,350 yuan per tonne. Market quotations are currently stable, with actual transaction prices fluctuating within a narrow range. Despite a sudden price increase by a propylene oxide producer, further upside is expected to be limited.

Market analysis indicates that demand for most polyether grades remains in a seasonal downturn. While list prices are holding steady, producers have shown a growing willingness to negotiate on actual sales. However, new orders continue to receive a muted response despite concessions. Meanwhile, the anticipated restart of Levima's propylene oxide unit this week is expected to reinforce bearish sentiment. Guangxi Tongkun's planned ramp-up in polyether production will further add to supply-side pressure, exacerbating the oversupply situation. Although cyclopropane inventories remain relatively low, market sentiment is skewed toward the downside. As a result, polyether prices are likely to track cyclopropane's downward movement this week, with soft foam polyether prices in North China and Shandong potentially falling to 7,900–8,000 yuan per tonne.

Looking ahead to the end of the month, polyether prices are expected to trend downward for most periods. Should prices reach levels deemed acceptable by downstream buyers this week, replenishment at lower prices may emerge, which could help stabilize the market or prompt a slight rebound. Conversely, if the decline proves slow and limited while downstream demand remains subdued, further downward pressure may extend into next week. As the New Year holiday approaches, some pre-holiday restocking may occur at relatively low price levels toward the end of next week, though the short holiday duration is expected to constrain restocking volumes.

Overall, China's polyether market is projected to remain weak and volatile in the second half of the month. While prices may see minor range-bound adjustments, soft foam polyether — particularly lower-priced grades — is unlikely to reach the 8,000 yuan per tonne level in the near term.