The Polyol market continued to remain sluggish across Globe during May 2023

Hamburg, Germany- The Polyol market continued to showcase bearish price movement during Q2, 2023 in the global markets. The Polyol’s Offtakes were depressing from downstream Polyurethane industries amid sluggish activities in the manufacturing and construction sector while supplies were sufficiently available globally.

Simultaneously, in the European region, Polyol's market was sagging, and suppliers gradually decreased their quotations amid ease in logistics constraints and ample availability of supplies even after the destocking practices at the end of April. As per the sources, the European manufacturers turned their cargoes to India to decrease the inventory levels and avoid further procurement activities. The Indian market accepted the European materials due to their premium cargo availability. The inflows of cargoes from China to India remain sluggish amid halted trading activities in the initial week of May due to the Labour Day holidays from 1st May to 3rd May 2023. Furthermore, In the Asian region, the Chinese market was weak amid an increase in new capacities and fallen demand for C3 derivatives.

The USA’s and Europe’s manufacturing Purchasing Manager’s Index fell in May 2023, indicating a contraction in manufacturing activities, and remained below 50 amid a decrease in new orders.

As per the ChemAnalyst data sources, the Polyol prices in the USA plunged by almost 7% during Q2 and were spotted at USD 3980/MT at the end of May 2023. Simultaneously, Polyol prices in Europe witnessed a marginal drop of 1% since the last quarter. At the end of mid-Q2 2023, Polyol prices in Germany hovered at USD 2760/MT.

On the contrary, Polyol’s feedstock Propylene Oxide prices were firm in Europe during May due to an improvement in demand from Propylene Glycol producers, which increased the upstream cost support on Polyol prices. Meanwhile, the energy costs were low and have consistently fallen in the European region with declines in upstream Natural Gas prices, especially in the Quarter 2 of the year with a rise in temperatures, reducing production costs of materials.

Concurrently the Propylene Oxide prices remained firm in the USA on the back of an increase in feedstock Propylene in the second half of May due to an escalation in prices of upstream Natural Gas Liquid because of affected gas exports from Canada caused by wildfires in Alberta and western provinces.

As per the anticipation, Polyol demand will improve in the Q3 of 2023 in the North American and European regions with an increase in the manufacturing of EV vehicles.