For the Quarter Ending September 2024
North America
Throughout Q3 2024, the Neopentyl Glycol (NPG) pricing landscape in North America experienced a notable upward trajectory, particularly in the USA, where significant price fluctuations were observed. Several influential factors contributed to this increase in market prices. Supply shortages stemming from weather-related disruptions, including hurricanes and storms, significantly impacted manufacturing activities, resulting in material scarcities and subsequent price surges.
In the USA, substantial price changes have been closely tied to strong demand from the construction sector, which has fueled the momentum of NPG prices. The limited cost pressure from stable feedstock prices has allowed the demand-supply imbalance to become the primary driver of these price hikes. Quarter-on-quarter analysis reveals a notable 3% price increase, highlighting a consistent uptrend in pricing dynamics.
As the quarter came to a close, the latest quarter-ending price for Neopentyl Glycol FOB Louisiana in the USA stood at USD 2,360/MT, signifying a robust and steadily increasing pricing environment throughout Q3 2024 and reflecting strong market fundamentals.
APAC
In the third quarter of 2024, the Neopentyl Glycol (NPG) market in the APAC region demonstrated an upward trend. Initially, the Chinese NPG market saw a notable price surge due to rising crude oil costs, NPG shortages, and robust demand from the paints and coatings sector. However, prices declined in the week ending July largely driven by falling prices of key raw materials like formaldehyde and crude oil, which reduced production rates and led to lower NPG prices. This decline was exacerbated by unfavourable weather conditions, particularly Typhoon Gaemi, which hampered construction activities and limited NPG demand. By the end of September, the market experienced a sharp price surge following a previous period of stagnation. Despite stable formaldehyde prices, a supply-demand imbalance, driven by strong interest from the downstream paints and coatings industry, significantly influenced the upward pricing trend in the Chinese NPG market. Moreover, the quarter-on-quarter analysis reveals a notable 8% price increase, highlighting a consistent uptrend in pricing dynamics. As Q3 2024 drew to a close, the latest quarter-ending price for Neopentyl Glycol FOB Qingdao in the China stood at USD 1500/MT, signifying a robust and steadily increasing pricing environment throughout the quarter.
Europe
In Q3 2024, the European Neopentyl Glycol (NPG) market experienced a notable decline in prices, driven by several key factors that influenced the overall market sentiment. The quarter was characterized by subdued demand, resulting in significant downward pressure on prices. Ample inventories of both domestically produced and imported NPG contributed to the price slump, as the narrowing supply-demand gap exacerbated the oversupply situation. Weak demand from the domestic construction sector, which continued to struggle with a downturn in new building projects throughout the year, further impacted prices. Stable prices of essential feedstocks like Formaldehyde and Crude Oil played a crucial role in limiting potential price increases, reinforcing the negative pricing environment. Germany saw significant price fluctuations, reflecting broader trends across the region. The quarter-on-quarter change of -1% highlighted the ongoing decline in NPG prices. By the end of Q3 2024, NPG was priced at USD 1,915 per metric ton, FOB Hamburg, emphasizing the challenging market conditions that characterized the region during this period.
For the Quarter Ending June 2024
North America
The second quarter of 2024 has been marked by a significant upward trend in Neopentyl Glycol (NPG) prices in the North American market. Key factors driving this price surge include heightened production costs stemming from increased feedstock prices, notably Formaldehyde and Crude Oil. The market also faced supply constraints, influenced by moderate to low manufacturing rates and intermittent labor shortages, which exacerbated the disparity between demand and supply. Additionally, robust performance in essential downstream sectors, particularly paints and coatings, has sustained the demand pressure on NPG prices.
In the construction sector, demand for NPG was buoyed by robust performance as the Spring buying season commenced. With the onset of spring, construction projects across the country experienced a significant increase in activity. These projects, including rural highway repaving, freeway-style interchange construction, and safety enhancements, aimed to address infrastructure needs and accommodate growing transportation demands. This construction surge reflected efforts to meet increasing demands, maintain existing infrastructure, and expand transportation networks to support various modes of transportation.
Additionally, there was a positive signal in the hospitality sector, with the volume of hotel rooms under construction growing year-over-year for the first time since June 2023, indicating a gradual recovery. These combined factors have driven up the demand for NPG, a crucial ingredient for construction paints and coatings. Concluding Q2 2024, the NPG price settled at USD 2130 per metric ton DEL New York, underscoring a stable yet positive pricing environment driven by sustained demand and constrained supply dynamics.
APAC
In Q2 2024, the Neopentyl Glycol (NPG) market in the APAC region experienced a robust price escalation. This upward trend was primarily driven by escalating costs of critical feedstocks, particularly formaldehyde, and a broader rise in crude oil prices. Such cost pressures significantly impacted the overall production expenses, thereby contributing to the inflationary pricing environment for NPG. The latest quarter-ending price for NPG 99% FOB Qingdao reached USD 1570/MT, underscoring this buoyant pricing environment. The heightened demand from the downstream construction and paints and coatings industries, spurred by seasonal factors, has also propelled prices upward. Supply chain disruptions, including logistical challenges and high freight rates, have further exacerbated the supply constraints. OPEC+ production cuts and geopolitical uncertainties in critical shipping routes have compounded these challenges, adding to the bullish price trend. Focusing exclusively on South Korea, the country has experienced the most notable price changes in the APAC region. The overall trend has been bullish, driven by a surge in demand from the automotive and construction sectors. Seasonal factors, such as increased construction activity during the warmer months, have further amplified this demand. Correlation in price changes reflects the broader regional dynamics, with South Korea's market closely mirroring the tight supply and high demand seen across APAC. The overall sentiment in the NPG market for Q2 2024 has been decisively positive, driven by substantial cost pressures, robust downstream demand, and supply constraints.
Europe
The second quarter of 2024 has been a challenging period for the Neopentyl Glycol (NPG) market in Europe, marked by a consistent downward trend in prices. Several significant factors contributed to the overall decline. Firstly, subdued demand from key end-user sectors, particularly construction and automotive, played a pivotal role. The construction sector faced a downturn due to various economic and geopolitical uncertainties, compounded by high financing costs and inadequate weather conditions. This led to diminished demand for NPG, a vital component in construction-related paints and coatings. Additionally, the automotive sector experienced a slump, particularly in sales of electric vehicles (EVs) and passenger cars, further dampening NPG demand. The withdrawal of government incentives for battery-powered electric vehicles exacerbated the situation, causing a notable decline in new registrations. Focusing on Germany, the NPG market observed the most substantial price changes within Europe. The percentage change from the same quarter last year was a notable 5% decrease, while the change from the previous quarter in 2024 was recorded at -2%. The latest quarter-ending price for NPG in Germany was USD 1970 per metric ton, reflecting the overall bearish pricing environment.
For the Quarter Ending March 2024
North America
In the first quarter of 2024, the North American Neopentyl Glycol (NPG) market witnessed a diverse pricing landscape, shaped by various influential factors. Overall, the pricing trajectory for NPG in the region leaned towards a bearish trend. Notably, there was a notable decline of 1.7% in January 2024, primarily driven by decreased demand from the downstream construction sector.
Furthermore, subdued purchasing activity during the winter holiday season further contributed to the downward pressure on prices. This adjustment was supported by improved supply conditions and a more balanced interaction between demand and supply dynamics. An overall decline in prices was observed when comparing the quarterly performance to the corresponding quarter of the previous year.
Throughout the quarter, seasonal patterns were evident, with a decrease in demand during the winter holiday period. Nonetheless, signs of market stabilization and gradual recovery emerged as the quarter progressed. Notably, the quarter-ending Free on Board (FOB) price in the USA was recorded at USD 2200/Mt at the Louisiana port, reflecting the latest market dynamics and pricing trends.
APAC
In the first quarter of 2024, Neopentyl Glycol (NPG) pricing in the APAC region exhibited a consistent decrease during the initial two months, influenced by various factors impacting market dynamics. Primarily, the weakened demand for NPG across sectors such as coatings and construction played a pivotal role in driving prices downward. The construction sector, particularly in China, experienced significant declines in demand, contributing to the overall price reduction. Insights gathered from market participants highlight the frailty of property investment and declining construction activity as key drivers behind the diminished demand for NPG. China, being a focal point in the region, witnessed substantial price fluctuations, with the construction sector's downturn significantly affecting NPG demand. The real estate sector, previously a major contributor to China's economic activity, entered its third year of crisis, further exacerbating the situation. According to the International Monetary Fund, the decline in new construction projects by 60% compared to pre-Covid-19 levels significantly impacted NPG demand, given its crucial role in construction paints and coatings. However, a noteworthy development occurred in March 2024, as the Chinese NPG market experienced a swift rebound, marked by a 0.8% increase attributed to moderate demand. This rebound signals a potential shift in market dynamics and hints at possible recovery in demand within the construction sector.
Europe
In the first quarter of 2024, Neopentyl Glycol (NPG) pricing in the European region demonstrated a consistent increase during the initial two months, driven by various factors shaping market dynamics. Notably, robust demand for NPG across sectors such as coatings and construction played a significant role in driving prices upwards. Additionally, disruptions in ocean routes adversely impacted international trading activities, contributing further to the price surge. Furthermore, demand from importing nations remained strong, bolstering market dynamics. However, as March approached, prices experienced a dip due to weakened client demand, particularly evident in the German construction sector. Market uncertainty and elevated interest rates influenced the ongoing decline in the German construction industry, resulting in reduced purchasing activity and downsizing by construction firms. Consequently, demand for NPG saw a decrease during this period. It is noteworthy that the quarter-ending Free on Board (FOB) price in Germany was recorded at USD 2030/Mt at the Hamburg port, reflecting the latest market dynamics and pricing trends. This figure provides insight into the prevailing market conditions and the evolving pricing landscape in the European NPG market.
For the Quarter Ending December 2023
North America
In the initial month of the fourth quarter of 2023, the North American Neopentyl Glycol (NPG) market witnessed a modest 0.9% increase, followed by a substantial decline in prices.
October 2023 brought about various influences on the market, notably the anticipated rise in upstream Crude Oil prices, contributing to heightened production costs for NPG. However, the NPG market in North America subsequently experienced a downturn in November 2023 marked by surplus material availability, trade uncertainties, and a weakened performance in the construction sector. Despite facing elevated borrowing costs, the construction spending sector in the USA maintained stability, while the manufacturing sector encountered persistent challenges. Insights from market participants indicated a 0.7% decline in spending on public construction projects, following a 1.3% increase in October.
State and local government spending decreased by 0.5%, and expenditures on federal government projects plummeted by 3.1%. Further, Persistent bottlenecks in the Panama Canal, exacerbated by prolonged drought conditions, led to delayed shipments and lengthy queues. Additionally, attacks in the Red Sea, a major trade route, further intensified the situation, driving ocean freight rates to higher levels. In response to the recent attack, Maersk announced the rerouting of vessels away from Red Sea routes, opting for navigation around Africa's Cape of Good Hope, significantly increasing tonne-miles. These developments resulted in a multifaceted challenge for global trade, causing a surge in inventories at ports. The intricate interplay of these factors contributed to a narrowed gap between demand and supply, consequently supporting the downturn in prices.
APAC
The Neopentyl Glycol (NPG) market in the Asia-Pacific region displayed a varied trend throughout the quarter concluding in December 2023. While prices exhibited an initial upswing in the first month of the quarter, they subsequently underwent a decline. In October 2023, the NPG market demonstrated a bullish stance characterized by stable supply and moderate demand. However, manufacturing units in the northern part of the region faced challenges, primarily stemming from the impact of the Beijing conference. The northern region experienced transportation restrictions, leading to a decrease in load for most manufacturers. As the quarter progressed, the NPG market shifted to a bearish stance, marked by average downstream demand and notably undervalued prices. Faced with the imperative to expedite shipments, holders of NPG engaged in negotiations for actual orders and extended discounts to navigate the challenging market conditions. The focus on trading diminished, with reports indicating prices falling below the lower threshold. In the new trading cycle, the NPG market reflected a pronounced bearish sentiment influenced by cautious traders and heightened pressure from downstream entry. Some suppliers, maintaining a firm stance, participated in negotiations at lower market levels, contributing to the overall downward trajectory.
Europe
Throughout the fourth quarter concluding in December 2023, the European Neopentyl Glycol (NPG) market experienced mixed sentiments. Substantial price declines of 5% and 5.7% were witnessed in the initial and final months of the quarter, respectively, indicative of a narrowed equilibrium between demand and supply. Notably, the absence of fresh orders from the downstream construction sector during a week underscored the notable impact of reduced economic activities, primarily influenced by inflationary pressures across the region. Further, the persistent lack of indications for a revival in downstream construction demand for NPG remained significant for several weeks into the quarter, attributed to a substantial decrease in new construction projects. In the broader economic context, the eurozone Construction PMI Total Activity Index, reported by Hamburg Commercial Bank (HCOB), registered at 43.4 in November, reflecting a slight improvement from October's ten-month low of 42.7. This marginal uptick in the index suggests a challenging environment for the construction sector, aligning with the observed decreased demand for NPG. As economic conditions continue to shape market dynamics, stakeholders in the NPG industry may need to adapt strategies to navigate the ongoing challenges in the construction sector. However, a marginal surge in NPG prices was observed during November 2023 due to a contraction in the manufacturing sector, resulting in supply shortages during this period.
