POE Recent Market Dynamics Intelligence

I. Price Trends
- Recent Price Performance: In May 2026, the POE market concluded its rapid upward price surge and entered a phase of narrow-range consolidation at elevated levels. As of May 27, mainstream grade prices remained at high levels, with the 4C grade averaging RMB 16,000/ton and the 8C grade averaging RMB 17,875/ton—exhibiting minimal price volatility.
- Regional Price Differentials: POE prices around the Shanghai region showed divergence: SK 871/875/8705 traded near RMB 18,000/ton; selected grades of the Versify? (Vistamaxx?) series were quoted around RMB 17,500/ton; SABIC/SK 4-carbon products averaged approximately RMB 14,500/ton; Mitsui grades were priced near RMB 17,000/ton; and domestic off-grade and pilot-scale materials ranged between RMB 14,500–16,500/ton.

II. Cost-End Dynamics
- Feedstock Price Fluctuations: Prices of upstream feedstocks—1-butene and ethylene—have recently declined. The 1-butene price fell to RMB 6,400/ton, down 17.6% month-on-month; the average ethylene price also declined to RMB 8,518.75/ton. Consequently, cost-side support for POE has weakened, though this downward pressure has yet to be fully transmitted to the POE market.
- Crude Oil Price Impact: Easing Middle East geopolitical tensions—and progressing U.S.–Iran negotiations—have contributed to a decline in international crude oil prices, which now fluctuate within the USD 90–100/barrel range, further diminishing cost-side support for POE.

III. Supply-Demand Landscape
- Supply-Side Developments:
- Domestic capacity is gradually ramping up: BEY Phase II and Lianhong facilities have commenced trial operations, resulting in relatively stable overall market supply.
- China’s planned domestic POE capacity for 2026 reaches 1.5 million tons; however, due to technical maturity constraints and extended certification cycles, the expected actual utilization rate stands at only 60–70%, limiting near-term supply pressure.
- Demand-Side Performance:
- Recovery in overseas demand for photovoltaic (PV) modules has boosted PV module exports and driven strong POE procurement demand. However, as the industry enters its traditional off-season, downstream sectors—including PV encapsulant film and modified plastics—have experienced declining operating rates.
- The automotive lightweighting trend continues to expand POE applications in automotive interior, exterior, and sealing components; nevertheless, POE’s share of total automotive polymer consumption may relatively decline.
- Following the prior sharp price increase, downstream buyers have grown increasingly resistant to high prices, resulting in predominantly need-based purchasing behavior and subdued trading activity.

IV. Import-Export Situation
- Import Volume Trends: China’s POE imports reached 910,000 tons in 2024, representing a 6% year-on-year increase. In Q1 2026, however, import volume declined by 37.81% year-on-year, reflecting accelerated domestic substitution and narrowing arbitrage opportunities.
- Export Performance: POE exports hit a record high of 6,800 tons in March 2026—a 47.06% year-on-year increase—indicating steadily improving international competitiveness of domestically produced POE.

V. Market Sentiment and Inventory
- Trading-Channel Inventory: Inventory accumulation occurred across the trading channel during Q1; some profit-taking positions prioritized prompt sales, generating short-term selling pressure.
- Market Sentiment: Industry participants hold cautious outlooks; bearish sentiment has intensified among certain stakeholders. Nevertheless, supply-side support remains intact, sustaining high-level price consolidation.

Analysis & Assessment

I. Weakening Cost Support, Yet Persistent Supply-Side Support
- Falling crude oil prices have reduced feedstock costs (1-butene and ethylene), weakening cost-driven support for POE. However, new domestic capacity additions are proceeding slowly, with several units still in trial operation; overall supply remains balanced without significant oversupply.

II. Demand Entering Off-Season, Yet PV Demand Retains Resilience
- Overseas PV demand recovery sustains robust component export volumes and ongoing POE procurement growth. Nevertheless, traditional seasonal slowdowns have lowered downstream operating rates, while heightened resistance to elevated prices has dampened demand-side support.

III. Evolving Import-Export Pattern and Accelerated Domestic Substitution
- Declining import volumes alongside growing domestic market penetration underscore deepening domestic substitution. Record-high export volumes confirm strengthening global competitiveness of Chinese POE.

Forecast

I. Short-Term: Prices to Remain in High-Level Consolidation
- While cost-side support weakens, continued supply-side stability—combined with resilient PV sector demand—suggests POE prices will likely sustain a narrow-range, high-level consolidation pattern in the near term, with limited volatility.

II. Medium-Term: Prices Face Downward Pressure
- Gradual commissioning of new production capacity will intensify supply pressure. Concurrently, traditional off-season demand softness, lower downstream operating rates, and persistent price resistance are expected to exert downward pressure on POE prices over the medium term.

III. Long-Term: Prices to Gradually Normalize
- As new domestic POE capacities come online and domestic substitution advances, the overall supply-demand balance will progressively improve. Consequently, long-term POE prices are projected to gradually revert toward rationality—though close monitoring remains warranted for key variables including new capacity ramp-up timelines, crude oil price trends, and evolving PV sector demand dynamics.