Oscillations in the demand fundamentals fluctuates the prices of Asian Polyethylene Glycol

Jeddah, Saudi Arabia- In Saudi Arabia, a key producer and exporter of Polyethylene Glycol, June 2023 prices increased due to insufficient availability of supplies due to previously declined production rates and consistent demand from importers. The available supplies were moderately low due to the slump in manufacturing activities from the past few months. The orders were firm from the downstream skincare manufacturers, providing support to the price trend. Simultaneously, consistent consumption rates of Polyethylene Glycol from the food sector depleted the domestic inventory levels. Simultaneously, orders were adequate from downstream sealants and coatings producers amid consistent activities in the construction sector. Meanwhile, Saudi Arabia’s manufacturing PMI rose to 59.6 during June 2023 due to expansion in manufacturing activities amid an increase in new orders from international importers.

In June 2023, the prices of Polyethylene Glycol decreased in India due to sufficient availability of supplies. The market inventory levels were firm due to previous increases in imports from the Middle East. On the contrary, offtakes remained inadequate due to depressed demand from the buyers. The rising food inflation negatively impacted the consumer's purchasing power. It slightly reduced the offtakes of skincare products from the market. Simultaneously, demand declined from cosmetics and skincare product producers due to the impacted consumer's purchasing power amid the rise in food inflation in the country. Nevertheless, orders were inadequate from downstream sealants and coatings producers amid depressed activities in the construction and electronics industries. Conclusively, India's manufacturing Purchasing Manager's index fell slightly during June 2023 but remained above 50, indicating a slowdown in the expansion of the manufacturing sector.

Meanwhile, the production costs of Polyethylene Glycol decreased due to the contraction in the feedstock Ethylene costs amid volatile upstream Crude Oil prices and reduced cost support from upstream Naphtha. As per the ChemAnalyst data sources, In June 2023, the market quotations of Polyethylene Glycol witnessed USD 1331/MT in India after a marginal decrease of 2.5% during the month. On the contrary, Polyethylene Glycol prices in Saudi Arabia hovered at USD 990/MT, post a monthly increase of 2.5%.

As per the estimation, Polyethylene Glycol prices are likely to increase in Asia due to the recent increase in demand from the pharmaceutical sector. The increasing cases of Conjunctivitis in India raised the consumption of eye drops and Polyethylene Glycol in July 2023 and demand will remain firm in forthcoming months. Meanwhile, the availability of Polyethylene Glycol is moderately low due to the affected supply chain activities during the monsoon season.