Polyether Polyol Market Surges 2026 | Cost Push & Supply Uncertainty Drive Sharp Rally

Last week, China’s domestic polyether polyol market staged a strong, rapid upward surge, driven by soaring upstream raw material costs and intensifying supply-side uncertainty. After active trading at high levels in the early part of the week, most producers suspended offers in the latter half as feedstock prices jumped sharply, creating volatile market sentiment. While cost pressures remain strong, downstream price resistance has grown noticeably, placing the market in a tight tug-of-war between cost support and weakening demand tolerance.

I. Market Surge: Weekly Prices Rise by Thousands of RMB

In the first week of March, the entire polyether polyol product line posted sharp gains, with average increases reaching approximately 1,000 RMB/ton.

• Soft foam polyether: up 750 RMB/ton

• Soft foam POP (polymer polyol): up 1,550 RMB/ton (the largest increase)

Early-week trading was robust: inquiries were active, major producers maintained normal sales, and overall supply was sufficient as operating rates for polyether and propylene oxide (PO) continued to recover. Trading volumes improved significantly, supported by post-holiday restocking demand.

However, from midweek onward, escalating geopolitical risks triggered a broad rally in global bulk commodities and chemical raw materials. The market shifted from fundamental-driven to strong cost-push momentum, eventually leading most producers to suspend offers by the weekend to manage risks. Some high-end quotations climbed above 11,000 RMB/ton.

II. Cost Side: The Core Driver of This Rally

Upstream raw material prices rose even more dramatically than polyether polyol, becoming the decisive force behind this round of increases.

By the end of last week:

• Propylene oxide (PO): up 2,500 RMB/ton weekly

• Styrene: up over 1,000 RMB/ton

• Propylene & pure benzene: up nearly 1,400 RMB/ton

• Ethylene oxide (EO): listed price by Sinopec East China up 1,200 RMB/ton

The market has fully entered a strong cost-push cycle, with producers rapidly raising prices and slowing order fulfillment to control risks.

Industry Structure: Large Capacity but Chronic Low Profit

Compared with the 2021 extreme market, China’s polyether and propylene oxide capacities have expanded by 61% and 90% respectively, but industry profitability has collapsed:

• Chlorohydrin-process PO: long-term losses

• Most polyether grades: thin margins or near break-even

• PDH-process propylene: sustained losses

This “high-capacity, low-profit” structure makes the entire chain extremely sensitive to supply-side shocks.

III. Market Outlook: Cost Push vs. Demand Resistance

In the short term, the polyether market will operate under dual conflicting logics:

Strong cost support vs. Downstream price resistance.

Positive Supports

• Persistent uncertainty in upstream raw material supply

• Poor industry profitability continuing to support supply-side narratives

• Cost-side momentum remains intact

Negative Constraints

• Downstream price transmission is blocked, especially in sponge manufacturing

• End-users have not fully absorbed the first post-holiday price increase

• Resistance to high-priced raw materials is strengthening

• Transactions may cool, shifting to rigid demand only

Short-Term Forecast

Next week, the market will focus on digesting current gains while closely tracking:

• Propylene oxide (PO) price trend

• Downstream demand follow-through

• Geopolitical and energy-cost changes

Overall market operation will turn more cautious.

In the longer term, this volatile, event-driven market has pushed the industry to rethink how to escape internal competition (“involution”) and move toward healthy, sustainable development.

About Achilles Chem Polyether Polyol

As a reliable global supplier, Achilles Chem provides high-quality polyether polyol and polymer polyol with stable hydroxyl value, consistent viscosity, and reliable batch-to-batch performance. Our products serve as a cost-effective alternative to Covestro, BASF, and Huntsman, supporting stable production for flexible foam, rigid foam, CASE, TPU, and elastomer applications worldwide.

With stable supply, professional technical support, and customized solutions, we help customers navigate raw material price volatility and ensure production continuity.