Reduced Demand From Polyol Producers Decreasing Propylene Oxide Prices in Germany

For the past few weeks, Propylene Oxide prices have consistently decreased in the European region. As per the latest data, Propylene Oxide prices continued to decline in Germany even at the beginning of the final month of the year 2022 amid sluggish market sentiments. The prime reason for this decline is weak demand sentiments for the product from the downstream Polyol and Glycol producers. As per reports, Propylene Oxide prices decreased by significant producers like LyondellBasell due to a plunge in the profit margins because of weak orders amid seasonally off demand from downstream industries amid high energy costs.

Propylene Oxide inventories were amply available in the country to cater to the demand from the downstream industries. On the contrary, the rise in feedstock Propylene price provided cost support to the production costs. Producers decreased their price quotations to improve the product offtakes from downstream Polyol and Propylene Glycol manufacturers. Consequently, at the end of the week, concluding on 2nd December 2022, Propylene Oxide prices in Germany witnessed 2040/MT. At the same time, decreasing Dutch TTF natural gas prices in the past few weeks eased the variable costs on production values of Propylene Oxide.

The cost of living has escalated noticeably amid high inflation, and consumer demand shifted in the past few weeks, causing an economic slowdown in the European region. Simultaneously the Propylene Oxide demand from the downstream Polyol producers remained weak from the end of October. The orders for downstream Polyurethane products plunged more specifically after Black Friday in late November due to reduced orders from end-user furniture manufacturers in the manufacturing sector.

As per ChemAnalyst, “The orders for Propylene Oxide are likely to remain stable from the downstream Polyol producers till the end of the year, and seasonal demand sentiments are likely to be seen from the manufacturing sector amid moderate production rates in domestic downstream industries.”