Global NPG Market Prevails a Rise Amidst Reviving Construction Sector
 Global NPG Market Prevails a Rise Amidst Reviving Construction Sector

Global NPG Market Prevails a Rise Amidst Reviving Construction Sector

  • 16-May-2024 4:06 PM
  • Journalist: Motoki Sasaki

Global Neopentyl Glycol (NPG) market experienced bullish market sentiments throughout the first half of May 2024. Various surveys conducted underscored the flourishing state of the construction sector within the country throughout April, extending into May 2024 indicating towards consistent demand of material from prominent end-user construction sector. In addition to this, a slight shortage of NPG was observed in the market prompting the way for widened disparity between demand and supply.

During the first two weeks of May 2024, the North American NPG market saw a slight surge in prices, primarily driven by a widening gap between demand and supply. Demand for NPG remained moderately high during this period, partly due to the resurgence in the construction and automotive sectors in the USA since February 2024. The construction sector, in particular, experienced buoyant demand for NPG as the Spring buying season kicked off. With the onset of spring, construction projects across the country witnessed a significant uptick in activity. These projects, ranging from rural highway repaving to freeway-style interchange construction and safety enhancements, aimed to address infrastructure needs and accommodate growing transportation demands. This surge in construction activity reflected concerted efforts to meet increasing demands, maintain existing infrastructure, and expand transportation networks to support various modes of transportation.

Simultaneously, a notable shortage of domestically produced NPG was observed within the North American market during this period. The shutdown of Baltimore's inner harbour compounded challenges in the shipping sector, disrupting logistics networks and impacting local shipping interests. While the shutdown negatively affected Baltimore's shipping operations, it resulted in increased traffic at other East Coast ports. These dynamics highlight the intricate interplay between demand, supply, and logistical challenges in shaping the NPG market landscape in North America during the early weeks of May 2024.

Similarly, the Chinese NPG market continue to surge with the price settling at USD  1325/MT for the week ending on May 10th. During this period, there was a sustained positive momentum in market demand, particularly within the construction sector. This trend prompted cement companies to intensify their operations in off-peak production periods. By doing so, they aimed to enhance the equilibrium between supply and demand dynamics within the NPG market. Consequently, this concerted effort led to an increased demand for NPG (Neopentyl glycol), a crucial raw material extensively utilized in various construction-related applications.

Further, a modest shortage of domestically produced NPG was observed within the Chinese market. Compounding this supply constraint, the labour day holiday observed from May 1st to May 5th resulted in a severe shortage of labour, with manufacturing units operating at a reduced capacity. Consequently, this labour shortage further exacerbated the scarcity of material within the market. In parallel, various market sources have indicated a deceleration in China's manufacturing and services sectors in April 2024. Data released by the National Bureau of Statistics (China) reveals that the Purchasing Managers' Index (PMI) for Manufacturing declined from 50.8 to 50.4 during the same period, aligning with market expectations.

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