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Increasing Demand From Polyurethane Industries Influencing the Propylene Oxide Demand in Europe
Increasing Demand From Polyurethane Industries Influencing the Propylene Oxide Demand in Europe

Increasing Demand From Polyurethane Industries Influencing the Propylene Oxide Demand in Europe

  • 30-Sep-2022 4:03 PM
  • Journalist: Robert Hume

Recently an improvement in the consumption levels of Polyether polyol has been seen in Europe's manufacturing sector due to firmness in the orders of Polyurethane foam from domestic furnishing mills. Simultaneously, Polyol is gaining value in other European countries like Netherlands and Belgium. Because of this, Polyol's feedstock Propylene Oxide prices remained firm in the European region, and the discussions of Propylene Oxide FOB Hamburg and Propylene Oxide FD Immingham hovered at USD 2150/MT and 2210/MT, respectively, after a near increment of 1% in the previous week's prices.

At the same time, the upstream Propylene price movement remained consistent on the back of increased demand and consumption levels from the Polyolefins industries, and Propylene Oxide prices rose by 7% during September 2022. Meanwhile, the product inventory levels are average, and downstream derivates volumes are reducing marginally in the manufacturing sector.

Meanwhile, rising shop inflation is adding numbers to the Polyol-made Polyurethane goods such as furniture. Retailers are now dealing with considerable cost pressure due to depreciating currency values, increasing energy and transportation costs, and a tight labor market. On the cherry on top, the European government will increase energy surcharges from the beginning of October.

The pressure is rising on the manufacturers while the feedstock inventories are limitedly available in the region due to the curtailed production rates to save energy for the winter month. However, to meet the manufacturing energy needs, industries can switch to coal or fuel oil, but it will take some time and increase the cost of production of feedstock and downstream products.

Germany is the third largest market for furniture in the world. The furniture market demand is increasing from the buyers, and as per the analysts, the orders will flood amid the black Friday holidays in November as it will be the start of Christmas shopping.

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