For the Quarter Ending June 2021
North America
During the second quarter of 2021, the supply conditions of the Propylene Glycol (PG) in the North American region improved, as a ripple effect of the improved operating efficiency at several Propane Dehydrogenation (PDH) units, refineries, and crackers in the US Gulf region. Although the regional industrial infrastructure recovered from the impact of winter storm Uri, several PG manufacturers still struggled to operate at normal efficiency. Dow Chemical surged the prices of all grades of Propylene Glycol (PG) by USD 221 per tonne effective from the June starting. Overall, in June the FOB Connecticut (USA) contractual price of Mono Propylene Glycol (MPG)-pharma grade was assessed at USD 2795 per tonne observing a decrement of USD 45 per tonne from the prices in March.
Asia Pacific
Impacted by lacklustre buying sentiments amidst the second COVID wave in India, the Propylene Glycol (PG) supply outlook remained severely curtailed in the Southeast Asia region due to persistent raw material shortage. Majority of the orders in Northeast Asia and China were placed from the pharmaceutical and personal care industry. Supplies in China were strong enough to cope with the enquiries from the downstream pharma sector. Some Chinese buyers were reluctant to procure the high-cost Propylene amidst rising inflation rate in China. Pricing trend in China showed mixed results as it plunged to January level in first half and then again started to strengthen in later half with FOB Tianjin Propylene Glycol (PG) pharma grade prices settling at USD 2930 per tonne in June.
Europe
Propylene Glycol (PG) supplies remained constrained in the second quarter of 2021, owing to the turnaround in major steam crackers in Northwest Europe which curtailed the availability of the key feedstock Propylene in the European region. However, some easiness was witnessed as the no of Propylene Glycol (PG) shipments from the USA improved over the previous quarter. As a repercussion, the prices remained on an uptrend amidst the supply demand imbalance. Demand outlook was firm from the regional market as the offtakes were constant from the downstream pharmaceutical and personal care sector.
For the Quarter Ending March 2021
North America
During Q1 2021, acute shortage of ECH could be observed in North America and the prices showed an abrupt spike. After devastating winter storm across the USA gulf coast, all the plants located in the proximity of storm had to shut down during mid-February, which reduced the total output of Epichlorohydrin by more than 50%. Availability of feedstock Propylene which is highly concentrated around the gulf of USA reduced after this rare climate calamity. Due to notable supply crunch, prices of ECH rose sharply from USD 2095/MT levels observed in January to USD 2395/MT in March.
Asia
The Asian market witnessed stable demand for ECH from the downstream sectors amidst fall in supply of the feedstock Propylene, which was critically short in the global market and high in demand. Prices of ECH in the Indian and Chinese market observed significant rises every week and reached USD 2165/MT in China during February and USD 1894.3/MT in India during March 2021. In addition, sentiments in the Indian markets were bolstered after DCM Shriram announced an investment of around USD 137 million to expand its business, in which construction of a new plant of ECH with annual capacity of 51,000 Tonnes was also included.
Europe
Due to huge spike in prices of feedstock chemicals, price of ECH rose effectively Q-o-Q. Unfavourable weather conditions across some countries disrupted the supply chain activity causing the manufacturers to announce force majeures on their plants due to low availability of the feedstock chemicals like Propylene. One major producer from Germany mentioned that, due to high container prices, exports of ECH from Germany to Asia was getting too expensive.
For the Quarter Ending September 2020
Asia
ECH supply remained restricted with offers registering marked gains across Asia triggered by scheduled turnarounds and unplanned outages which kept the spot availabilities low between July-August. A Chinese ECH plant curtailed operating rates in August due to issues pertaining to upstream units. Moreover, ECH supplies from the 130 KTPA Jiangsu Haixing plant were taken offline in the early August due to technical issues. Demand was healthy in China, buoyed by ramped run rates at the downstream plants as several epoxy makers rushed to procure volumes before the extended National Day holidays begin in October. CFR China prices for ECH were heard around USD 1200-1250 per MT in August, amid anticipations that supply may further tighten in Q4. Offtakes by some Northeast Asian countries were capped due to lackluster downstream buying.
North America
ECH supply-demand gap stood balanced in Q3 because of the resumption in operations at the manufacturing unit of a leading producer who remained shut during Q2. Sentiments were hard hit after the sole ECH producer announced to shut down a Novalac plant in North America, which wasn't much productive. Meanwhile, demand started losing grounds post a much-needed recovery observed across the automotive and construction sectors. Firming Propylene lent support to the pricing curve which started regaining the uptrend. Amid suppressed dynamics, players maintained a cautious stance to monitor the global economic developments, especially in China, to see if it translates into more positive sentiments and redirect the trade flows.
Europe
The European ECH market turned quite balanced moving into Q3 as the supply-demand scenario was seen pushing back towards demand because only limited supply additions were foreseen on the horizon. Demand for Epoxy Resins was seen gradually recovering from the Q2 coronavirus impact causing players to report lifted margins. Players were able to materialize price increases as inventories in the European markets were replenished with higher cost stock. The downstream inquiries and purchases were seen showing greater activity over Q2 amid fears that some uncertainty is likely to persist even in Q4.
