Reasons for Price Volatility in Polymer Polyol (POP)

                                                                    Reasons for Price Volatility in Polymer Polyol (POP)

POP（Polymer Polyol） is a polyurethane intermediate; its cost is heavily tied to crude oil-based chemical feedstocks, and it is characterized by highly cyclical downstream demand, low supply elasticity, and frequent disruptions from trade and policy factors. The convergence of these elements leads to significant price swings and rapid market shifts.

1. Upstream raw material costs account for a very high proportion, with crude oil price fluctuations directly impacting prices (the core reason).

The primary raw materials for POP synthesis—propylene oxide (PO), styrene monomer (SM), and acrylonitrile (AN)—collectively account for 82%–85% of production costs.

2. PO accounts for over 50% of the total POP cost; PO is produced from propylene, the price of which is directly linked to international crude oil.

3. SM and AN are derived from benzene and ethylene, which also track crude oil price movements.

Price transmission chain: Brent crude oil → Propylene → Propylene oxide → POP.

A daily fluctuation of $5–$10 in crude oil prices triggers immediate changes in propylene prices; PO prices fluctuate by over a thousand yuan per tonne, and POP prices rise or fall in tandem.

4. Calculation: For every 1,000 yuan/tonne increase in PO prices, POP production costs rise by 650–700 yuan/tonne. With industry gross margins at only 12%–15%, even minor fluctuations in raw material costs can lead to significant changes in ex-factory prices.

"Price scissors" effects among multiple raw materials amplify volatility.

PO, styrene, and acrylonitrile belong to different chemical industry cycles, meaning their price movements are often out of sync; manufacturers face fluctuating costs and are forced to adjust prices frequently.