The POP (Polyether Polyol) market is navigating a phase of low-level volatility, marked by rapid price swings and cautious sentiment as the Spring Festival approaches. After a short-lived rally driven by policy stimuli, prices have retreated—yet cost factors and fundamental dynamics are providing a floor for further declines. As a critical raw material for flexible polyurethane foams, sponges, and specialty elastomers, POP polyether’s price trajectory impacts downstream industries spanning furniture, automotive, and consumer goods. This blog analyzes the current market drivers, short-term outlook, and key factors shaping supply and demand for POP polyether.
Current Market Dynamics: Price Volatility & Cautious Sentiment
January has been a turbulent month for POP polyether, with prices swinging sharply amid conflicting stimuli:
Recent Price Movements
Rapid Rise Followed by Retreat: Earlier in the month, POP polyether prices surged by 500–700 yuan/ton in response to the export tax rebate cancellation announcement, driving strong export orders and short-term replenishment. However, the rally quickly lost momentum—this week, prices fell by 200–400 yuan/ton, with domestic soft foam POP polyether negotiation prices dropping to 8,250–8,500 yuan/ton (cash on delivery at the factory).
Uneven Demand Response: Export markets saw a round of restocking during the price rally, but domestic sponge manufacturers showed low acceptance of higher prices. As downstream production enters year-end countdown mode, trading activity has cooled, and price cuts have failed to stimulate significant domestic order growth.
Cost Drivers: Mixed Signals from Raw Materials
Cost dynamics are playing a pivotal role in limiting further price declines, despite recent downward pressure:
Styrene Price Surge: A key raw material for POP polyether, styrene has risen by nearly 1,000 yuan/ton, offsetting some cost pressure from low acrylonitrile prices. This has squeezed theoretical gross margins for POP producers to a razor-thin 100 yuan/ton, limiting their willingness to cut prices further.
Propylene Oxide Volatility: The main raw material, propylene oxide (PO), has experienced rapid declines followed by tentative stabilization. Short-term fluctuations in PO prices, coupled with occasional plant operational changes, are keeping market participants closely monitoring cost trends.
Fundamental Support: Supply Constraints & Export Cushion
Despite weak demand momentum, fundamental factors are providing critical support for POP polyether prices:
Supply Side: Production Cuts from Major Factories
Changhua Chemical Maintenance: One of China’s top three POP producers, Changhua Chemical, has entered planned maintenance at the end of January. The 7–10-day shutdown will reduce soft foam POP output, directly tightening market supply and easing shipment pressure for manufacturers.
High Industry Concentration: The POP polyether market is highly concentrated, with limited production capacity adjustments in the short term. This concentration prevents excessive supply expansion and provides a floor for prices.
Export Cushion: Significant Overseas Demand
High Export Proportion: POP polyether’s export share exceeds 35%, making overseas markets a key demand pillar. The pre-Spring Festival shipment window, combined with the final opportunity to secure export tax rebates before April 2026, is supporting manufacturer order volumes and preventing inventory buildup.
Global Market Presence: Trusted suppliers like Achilles Chemical have established a strong global footprint, exporting POP polyether to key markets including Vietnam, India, Saudi Arabia, and Brazil. This diversification helps mitigate the impact of weak domestic demand.
Domestic Demand: Last-Minute Pre-Holiday Replenishment
Festive Stockpiling: While downstream sponge enterprises are preparing to shut down for the Spring Festival in February, a round of last-minute urgent replenishment has emerged. Although the scale is limited, it provides short-term demand support and prevents a steeper price decline.
Rigid Demand Resilience: Core domestic demand for POP polyether remains intact, with essential production needs sustaining baseline consumption even as discretionary purchasing slows.
Short-Term Outlook: Moderate Decline to Stimulate Demand
As the Spring Festival approaches, the POP polyether market is expected to see moderate adjustments, with three key trends to watch:
Price Trajectory
Near-Term Adjustment: In the final settlement week of January, prices may decline moderately to stimulate urgent pre-holiday replenishment. However, cost support from styrene and supply constraints from Changhua Chemical’s maintenance will limit the downside—preventing prices from falling below key support levels.
Post-Holiday Uncertainty: After February, downstream enterprises will gradually resume production, but the pace of demand recovery will depend on inventory levels and market sentiment. The long-term impact of the export tax rebate cancellation will also start to materialize, potentially pressuring exports.
Key Monitoring Points
Raw Material Trends: Further fluctuations in propylene oxide and styrene prices will directly influence POP polyether’s cost structure and manufacturer pricing strategies.
Factory Operations: The resumption schedule of Changhua Chemical and other major producers will shape post-holiday supply dynamics.
Export Shipments: The volume of pre-rebate cancellation exports will determine how much inventory manufacturers carry into the new year.
Strategic Recommendations for Stakeholders
Navigating the current low-volatility, high-uncertainty market requires a balanced approach:
For Manufacturers & Exporters
Optimize Order Mix: Prioritize high-margin export orders to capitalize on the pre-rebate window, while adjusting domestic pricing strategically to clear near-term inventory.
Cost Control: Leverage stable raw material sourcing and integrated production processes to maintain profitability amid thin margins. Partner with reliable suppliers offering consistent quality, such as Achilles Chemical, to ensure supply chain resilience.
Monitor Maintenance Schedules: Align production plans with industry maintenance cycles to avoid supply gluts or shortages.
For Downstream Buyers & Traders
Targeted Replenishment: Conduct pre-holiday stockpiling selectively, focusing on essential demand to avoid inventory risks during the shutdown period.
Price Sensitivity: Capitalize on moderate price declines to lock in costs, but avoid overstocking given the uncertain post-holiday demand outlook.
Supplier Diversification: Maintain relationships with multiple POP polyether suppliers to mitigate risks from production cuts or price volatility.
Conclusion: Low-Level Oscillation with Limited Downside
The POP polyether market is in a phase of cautious equilibrium—price declines are constrained by cost support and supply cuts, while demand remains muted ahead of the Spring Festival. The short-term outlook points to moderate adjustments to stimulate pre-holiday replenishment, but fundamental factors will prevent a sharp collapse. As the export tax rebate window closes and post-holiday demand resumes, the market will shift its focus to cost trends and global demand dynamics.
For stakeholders across the value chain, success will depend on agility—adapting to price swings, monitoring supply constraints, and leveraging export opportunities while managing domestic inventory risks. By partnering with trusted suppliers and staying attuned to market signals, businesses can navigate the current low-level oscillation and position themselves for success in the post-holiday period.
