Feeble Demand Constrains the Neopentyl Glycol Prices in Europe

The price of Neopentyl Glycol is witnessing a declining trend in the Europe market due to weak orders from the downstream paints & coating, construction, and other key driving sectors. The new intakes from the overseas market were reduced due to the stagnant global economic activity, and the market is in wait-and-see mode in the Eurozone.

Since February 2023, Neopentyl Glycol has seen a narrow price range because of low trading activities from both Europe and the overseas market. The construction industry remained gloomy in April 2023 and continues in the first two weeks of May 2023 due to new orders decreasing in the region.

In terms of demand, there was no improvement in the demand for Neopentyl Glycol, and the product had enough supply in the market to cater to the requirements of the downstream sectors. The market participants also say the delivery time on purchases improved in April 2023 and will likely continue for the rest of the year. Further, the feedstock Formaldehyde to produce Neopentyl Glycol saw a downward price pattern in the Eurozone which was attributed to the negative price movement of the downstream derivative industries, including Neopentyl Glycol.

In addition, rising interest rates have impacted all sectors, including the petrochemical industry, dampening the Eurozone's purchasing activity. Recently, the German manufacturing Purchasing Manager's Index (PMI) remained firmly in contraction territory in April 2023, which indicates downturn trading activity.

According to ChemAnalyst, the cost of Neopentyl Glycol witnessed USD 1930/MT on a FOB Hamburg basis during the second week of May 2023.

Neopentyl Glycol is expected to decline in the Eurozone if the construction industry is likely to continue to be weaker in the domestic market. Rising interest rates and low investment interest might affect business activity in German which subdues the consumption of Neopentyl Glycol in the Eurozone market.