Bearish Demand Outlook Weakens European Glycol Ether Prices in February 2023
- 22-Mar-2023 5:42 PM
- Journalist: Patrick Knight
The Glycol Ether market trend showcasing bearish sentiments for the past few months, and its prices are consistently declining from Quarter 3 of 2022 in the European region. The data indicates that the Glycol Ether prices have fallen by 27% since September 2022. According to ChemAnalyst's recent data sources, at the end of February 2023, Ethylene Glycol Monobutyl Ether prices in Germany were observed USD 1394/MT, after a monthly decrease of 3.5% in the last month's discussions.
The cost support on Glycol Ether prices decreased as the recent decreases in the input Natural Gas costs on the back of sufficient availability of Liquified Natural Gas inventories in the region. Simultaneously, feedstock Ethylene prices plunged during the month due to weak demand from durable goods producers, reducing the cost pressure on the production costs of Glycol Ether. At the same time, production rates remained firm, and supplies were sufficiently available in the market.
The inquiries for Glycol Ether dampened noticeably from the downstream paint producers amid weak offtakes from the construction and automotive sectors. While the demand for paints was depressing in the construction sector due to reduced construction activities, the orders from the automotive manufacturers dampened noticeably during the month. According to the Federal Motor Transport Authority of Europe, Car registrations fell by 43% in February as per their data sources. Furthermore, the manufacturing activities contracted again in the European region, and manufacturing PMI declined in February 2023.
As per the estimation, "Glycol Ether's prices will rebound soon amid stabilization in input costs and weak availability of feedstocks. In the initial week of February 2023, Europe increased its sanctions on Russian products and shifted toward the USA for the need for Crude oil and Natural Gas. Due to the limited availability of petrochemicals, the upstream naphtha prices may spike in the European region. Also, the availability of Ethylene is limited in Europe, which will affect the production rates of Glycol Ether. While demand for Glycol Ether will likely improve from the construction sector amid increases in construction activities in warm weather."