Diethylene Glycol Prices in India Tumbled on Slumbering Spot Purchasing Activities

Contrary to the expectations of gathering steam after the year-end dullness in demand and low-lying offers for ensuring stock-clearance, the Diethylene Glycol market in India remained underwhelmed throughout January. As per the ChemAnalyst database, the last Friday assessed prices that hovered around USD 829/MT Ex-Delhi NCR showed a slump of 3% from the prices recorded in the last week of December.

The decrease in the price trends resulted from the active stockpiling activity during the closing days of December when buyers, taking the opportunity of low quoted prices by traders, procured ample volumes of Diethylene Glycol for catering to the consumer demand. The looming uncertainties on consistency in Diethylene Glycol supplies in the forthcoming days owing to delays because of increasing Covid cases in the country coupled with climbing ethylene oxide feedstock prices in the global market further propelled the buyers to keep reserve stocks to prevent hurting customer sentiments. The repercussions of the hefty consumption of Diethylene Glycol in the previous weeks were evidenced in January when spot purchasing stood weak. “We already have enough stocks to last till mid-February, hence further buying shall have to wait” – responded a local downstream buyer to our correspondent.

Diethylene glycol is a viscous, high-boiling organic compound that is widely used in the production of lubricants and polyester resins. Given the sluggish growth in the construction and automobile sector amid the Covid-induced restrictions, the dull demand prospects for these materials failed to exert a push to the spot purchasing activities thus compelling the traders to stick on tamed price levels.

According to ChemAnalyst, the Diethylene Glycol market is expected to suffer further blows in price levels owing to the protracted recovery in the construction and automobile sectors causing the buyers to stay on the backfoot. In line with the ongoing market sentiments, a decline of 2-3% in prices during February is likely to be witnessed by the market. An improvement in the spot purchases is expected in the starting weeks of March with relaxing movement restrictions upon receding Covid impact, which shall give a boost to the downstream industries and impart bullishness in Diethylene Glycol prices.