Diethylene Glycol (DEG) Market Showcases Mixed Sentiments in the Global Market
Diethylene Glycol (DEG) Market Showcases Mixed Sentiments in the Global Market

Diethylene Glycol (DEG) Market Showcases Mixed Sentiments in the Global Market

  • 21-Oct-2024 3:15 PM
  • Journalist: Sasha Fernandes

In early half of October 2024, Diethylene Glycol (DEG) prices exhibited contrasting trends across the US, German, and Asian markets. The US and Germany experienced a declining price trend, while the Asian market, particularly China, saw a bullish upturn.

In the US, DEG prices depreciated by 1.92% during the first half of October, largely driven by oversupply and weak demand conditions. The US domestic market saw weak demand for DEG, particularly in the downstream resin manufacturing sector, driven by reduced consumption in the paints and coatings industry, along with a downturn in the automotive sector. Support from feedstock remained insufficient, as Ethylene Oxide prices fell by 2%, further weakening the price sentiment for DEG. On the demand side, DEG consumption in the paints and coatings industry stayed subdued, alongside reduced activity in the automotive sector. Market reports revealed a 12% year-on-year decline in U.S. auto sales in September, indicating a slowdown in both passenger car and truck sales. Low consumer sentiment, driven by concerns over the labor market, rising inflation, and sluggish job growth, further exacerbated the weak demand for DEG across key downstream industries.

In Germany, DEG prices similarly dropped by 1.92% in early October, with decreased demand from key downstream industries contributing to the decline. The situation was exacerbated by falling feedstock Ethylene Oxide prices, which fell by 2.2% in response to weakening Ethylene prices. As a result, DEG supply in the German market remained abundant. The European energy market also experienced significant drops in prices, with natural gas by 4.5%. Demand for DEG remained weak due to declining activity in resin manufacturing and subdued consumption in the paints and coatings industry. The German automotive sector also played a role in reducing DEG demand, as official data indicated a 7% year-on-year decline in new car sales in September 2024. Despite rising demand for electric vehicles (EVs), overall car registrations fell, affecting downstream industries reliant on DEG.

Conversely, in the APAC region, DEG prices followed a bullish trend, particularly in China, where prices surged by 3.7% in early half of October. The primary factors driving this increase included tight supply conditions due to planned maintenance shutdowns at local DEG manufacturing units and reduced container imports amid escalating geopolitical tensions in the Middle East. These tensions led to rising global crude oil prices, subsequently increasing the cost of oil derivatives like DEG. Moreover, the Chinese market faced labor shortages during long holidays, leading to reduced production and tighter supply. Despite these supply-side constraints, demand for DEG in the region remained moderate, supporting the price hike.

Analysts expect DEG prices across all regions to remain low in the coming weeks, reflecting moderate demand from downstream industries. However, ongoing geopolitical and economic factors may continue to influence market dynamics.

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