Price Surges Over 50% Within the Month! Propylene Oxide Defies Market Trends with Strong Performance, Margin Traders Rush to Buy These Stocks (List)

Propylene Oxide performed strongly in the early trading session on March 26, with Shida Shenghua and Bohai Chemical hitting the daily limit; Qixiang Tengda, Satellite Chemical, and Wanhua Chemical also saw significant gains.

Prices have increased over 50% this month

According to market news, influenced by the Middle East geopolitical situation, navigation through the Strait of Hormuz has been restricted, causing fluctuations in the global energy and chemical supply chains. The propylene oxide (PO) market has experienced a phased, sharp increase, attracting market attention.

Data from Eastmoney Choice shows that on March 25, the mainstream price of propylene oxide in Shandong was 12,500 yuan/ton, up 56.54% from 7,985 yuan/ton on February 28, less than a month earlier.

Market participants believe that this round of propylene oxide price increases features rapid surges, with cost transmission being the core logic. Rising international oil prices have driven up the prices of key raw materials such as propylene, pure benzene, and methanol. Propylene prices have reached nearly a seven-year high. Pure benzene supplies in Southeast Asia have decreased due to force majeure, further amplifying raw material price increases. The costs of various propylene oxide production processes have risen simultaneously, causing companies to passively raise their factory gate prices.

The continued rise in propylene oxide prices has also led to passive increases in downstream products like polyether polyols and propylene glycol. For example, in Shandong, the mainstream price of propylene glycol on March 26 reached 10,000 yuan/ton, up 81.82% from 5,500 yuan/ton on February 28.

Listed companies respond actively

The sustained increase in propylene oxide prices has also raised concerns about the impact on the performance of related listed companies. Currently, main companies involved in or with propylene oxide businesses in A-shares include Binzhou Chemical, Satellite Chemical, Wanhua Chemical, Weiyuan Shares, Hangjin Technology, Huatai Shares, and Hongbaoli, among which Binzhou Chemical, Satellite Chemical, and Wanhua Chemical are leading enterprises with significant capacity.

Recently, Hangjin Technology stated on an interactive platform that its propylene oxide plant is operating at full capacity; Huatai Shares said it has an 80,000-ton annual capacity, mainly for external sales, and recent fluctuations in raw material and product prices have had limited impact on Q1 performance; Hongbaoli revealed that its propylene oxide production facility is still undergoing technical upgrades and has not yet resumed production, with an expected restart before the end of June this year.

Supply and demand landscape in the industry chain

It is worth noting that, according to Securities Times, China’s propylene oxide industry has entered the era of 10 million tons of capacity, with industry capacity expected to reach 10.4 million tons/year by 2026, a 20% year-on-year increase. Leading companies such as Wanhua Chemical, Satellite Chemical, Binzhou Chemical, and Weiyuan Shares hold the main capacity, and industry concentration continues to rise.

Globally, Guotai Junan Futures states that Asia is the core region for propylene oxide capacity, with China dominating within Asia. By 2024, China already accounts for over 70% of Asia’s total capacity, and nearly all recent global capacity increases have come from China.

On the demand side, over 75% of propylene oxide is used in polyether polyols, which are applied in furniture, automotive, building insulation, and new energy battery packaging. In March, downstream demand showed a basic need support but resistance to high prices, with polyether polyol capacity utilization at 61.9%. Propylene glycol capacity utilization is 49.75%, with downstream companies less willing to chase high prices, leading to a market with a strong wait-and-see sentiment and a slowdown in cost transmission.

Industry agencies such as ZhuoChuang Information and Business Society indicate that the current propylene oxide market is characterized by “cost-driven, supply and demand following” operation. The Middle East situation is an external variable that only influences the market through costs and does not change China’s self-sufficiency core pattern. For industry companies, full supply chain deployment, cost control capabilities, and high-end demand matching will become core competitiveness. Leading companies, with scale and technological advantages, are better able to withstand raw material price fluctuations and capacity expansion pressures. As geopolitical tensions gradually clarify, the propylene oxide market will shake off cost pulse effects and return to a supply-demand driven trajectory, with further industry structural differentiation.

Leverage funds’ stock picks exposure

In terms of individual stocks, since this month, many stocks in the propylene oxide sector have been actively bought by leveraged funds. Wanhua Chemical saw a net financing purchase of 153 million yuan, and Shida Shenghua was net bought for 104 million yuan. Binzhou Chemical, Yonghe Shares, China National Chemical, Bohai Chemical, and others also saw significant net financing inflows.

Looking ahead to 2026, institutional performance forecasts show that among stocks favored by leverage funds, Qixiang Tengda is expected to see a 761.4% year-on-year increase in performance. Wanhua Chemical, Yonghe Shares, Satellite Chemical, Sinochem International, Zhongchumiao, Lianhong Xinke, and Ruihua Technology are also expected to achieve double-digit growth.

(Source: Eastmoney Research Center)