Propylene Glycol Prices Rebound in August After a Prolonged Decline

A recovery is heralded in Propylene Glycol prices after a two-month drop as the market supply is relatively low. The prices of Propylene glycol in China showcased an upsurge in early August and continued to rise till now, but the overall trend was still down.

In the 1st week of August, a slightly negative trend was shown in the Propylene Glycol market, with cautious downstream demand and primarily profit-cutting shipping from the plants. As of August 26, 2022, the prices of USP-grade Propylene Glycol at FOB Qingdao and Ex-Qingdao increased by USD 150/MT and 173/MT, or 7.6% and 9.1%, respectively, when compared to the price on August 5, 2022. The price quotations for Propylene Glycol from various providers are boosted because of the rise in export orders, although some suppliers' prices were still loss-making. The market's trading environment is acceptable, and the industry's mindset has improved.

The supply constraint has lightened until August 26, backed by the persistently low inventory of Propylene Glycol on the market. Production is progressively restored by Shandong Haike Chemical and Shandong Shida Shenghua Chemical while operating rates are reduced by Shaanxi Yulin Energy and Chemical and Zhetiedafeng. In addition, the prices of Propylene Glycol were previously low, undermining plants' margins. Thus, producers are active in pushing up Ex-work offers presently.

Downstream demand from various pharmaceutical and personal care sectors is slack, and end users purchase on a need-to basis, resulting in an increment in price patterns.

On the upstream side, the Propylene Oxide price trend shifted in China in the 3rd week of August, and the market is improving. The prices accelerate by 1.2% from August 12 to August 26. The feedstock Propylene costs have risen in the regional producers like South Korea, impacted by the increment in the Oil values from middle east countries, which led to an increment in the production cost of the Propylene Oxide.

According to ChemAnalyst, Propylene Glycol prices may increase in the short term as the market supply is relatively low. Still, the growth will be limited amid wait-and-see sentiment in the market. Propylene glycol market prices may rise further with the peak demand season in the coming weeks.