North American Market Concerned About Fluctuating Propylene Glycol Prices
- 31-Oct-2022 5:54 PM
- Journalist: Jacob Kutchner
Since the beginning of October, the Propylene Glycol (PG) domestic market trend in the North American region has displayed mixed sentiments. Chemanalyst data show U.S. PG Industrial Grade and Pharma Grade export prices rose USD 110/MT and USD 65/MT, or more than 3.5% and 2%, from October 1 to 15, but prices started to decline by more than 2% and 3%, respectively in the latter weeks of October. The export price of Propylene Glycol has been facing uncertainty, with market participants also eyeing the possible impact of the region's hurricane season.
During the first half of October, Propylene Glycol price chart witnessed an upward movement in the domestic US market on the back of increasing feedstock Propylene Oxide prices which were highly plagued by the protracted logistics issues and uncompetitive export pricing. Meanwhile, Consistent offtakes in downstream pharmaceutical industries kept the PG prices for pharma grade firm in the market. Nevertheless, market participants remained cautious about the amount of supply increase as production capacity started to increase from the second half of the month.
By H2 of the month, producers are stuck between the precipitous climb in energy costs and a steep demand decline, forcing lower run rates around the region. Despite some easing of backlogs at the nation's ports, retailers reported they were flushed with inventory this summer. Although this has resulted in an unprecedented cutback in the Propylene Glycol supply chain, the earlier price recovery has proved short-lived, as underlying demand was fundamentally not there. Additionally, increased production in North America did not make the region more competitive as expected due to lower PG prices in other regions.
According to ChemAnalyst, Propylene Glycol market prices may remain stable in the upcoming months as the market demand might be relatively low. Therefore, the growth will be limited amid wait-and-see sentiment in the market.