Propylene Glycol Prices Rebound in China

Shanghai (China): Over the last couple of months, the Chinese chemical manufacturing index observed a significant plunge in April, and the Purchaser's Manufacturing Index (PMI) declined from 48.1 to 46.0. These figures indicated the second successive deterioration in China's overall manufacturing business condition. This market situation is majorly attributed to the escalation of COVID-19 cases, and the measures taken by the authorities to restrict the spread have impacted the complete supply chain performance throughout April, corresponding to the market situation levied its impact on numerous commodities, including Propylene Glycol.

Since mid-March, the producer's quotations for Propylene Glycol observed a persistent downtrend, and the sentiments marked its presence throughout April and in early May. The time lag for the essential input amongst the manufacturers has been delayed. The ongoing travel restrictions, lockdowns, and limited availability of raw materials resulted in a slower demand outlook and the sharpest drop in the market sentiments throughout this period. In addition, the Propylene Glycol deliveries for the overseas market have been stuck in ports for weeks as the onloading and offloading activities at ports are operating according to the government's guideline that led to an increment in the port traffic by 500%.

Although the situation is improving slowly for the domestic Propylene Glycol market in the third week of May, the market consistently moves upward after observing a perisitent plunge. In recent terms, market experts quoted about the improvement in the exports of the Propylene Glycol to the overseas markets that released the pressure and eased the Propylene Glycol inventories, and it proportionally supported the producer's quotations at the Chinese spot market. In the third week, the prices for Propylene Glycol observed a surge of 6.7% in the Ex-Factory prices, which strengthened the domestic player mentality. At present, the trading atmosphere is acceptable, and the market transactions are active in the spot market.

According to the ChemAnalyst, the presence of the Chinese supplies will wear off the pressure from the global Propylene Glycol, as currently, the market is observing a constant inflated pressure from the gyration in the upstream energy cycle. In addition, the Chinese manufacturers were likely to benefit from the prevailing inflation in the global commodity market.