For the Quarter Ending June 2021
Even though supply of Neopentyl Glycol (NPG) improved significantly from the previous quarter, market outlook remained constraint due to the limited production activities of NPG. As a repercussion, OQ Chemical hiked the prices of NPG by USD 220 per tonne June. Demand surged from base resins and coating industries due to the increased consumption from the building and construction sector. Whereas the offtakes from the automotive sector remained hampered due to the slumped automotive production. As a ripple effect of supply demand imbalance coupled with cost support of the upstream, prices of NPG observed surged with FOB Texas discussions reaching USD 1770 per tonne in June.
In the Asia Pacific region, the supply remained tight during the second quarter of 2021 due to planned turnarounds. However, the situation improved in the second half with resumption of production in several facilities. Demand showcased mixed trends and varied in different parts in the region. In India, due to the resurgence of Covid, market activities slumped which reduced the domestic consumption of NPG as the wait and see approach strengthened in the first half of the quarter. Whereas the offtakes remained consistent in the Chinese market amidst the increased constructional activities.
The supply outlook of NPG in the European market was extremely constraint in the second quarter of 2021, owing to the limited availability of key upstream products which kept the production rates lower in the first half of the quarter. A major producer OQ chemical ended its prolonged turnaround in May which eased the supplies by certain margins. Thus, Perstorp hiked the prices of NPG by USD 356 per tonne and the overall pricing trend remained sturdy in the second quarter of 2021.
For the Quarter Ending March 2021
In Q1 2021, the supplies of Neopentyl Glycol (NPG) were constrained in the North American region, due to the limited availability of upstream products, as a result of the rigorous freeze weather conditions which hit the US Gulf region in mid-February, halting production at several producing belts throughout the region. A leading producer cited surged demand and sharp gains on the raw material front as key drivers of the uptrend. However, demand remained healthy due to the constant offtakes from the downstream coatings sector. BASF in March announce increase in the prices of Neopentyl Glycol by USD 600/ton, adding on to the increases during last quarter.
The Neopentyl Glycol market in Asia Pacific region was balanced to tight during the first quarter of 2021. Spot buyers started to replenish their inventories in early March after the plant outages during the Chinese Lunar New Year holidays in the northeast Asian region. The demand surge from the paints and coatings sector after the COVID vaccine rollout in the region improved the activities and offtakes. Surging raw material and global inflation in NPG rates further raised the cost pressure over regional buyers.
Supply of Neopentyl Glycol in the European region was tight during the first quarter of 2021, owing to the force majeure declared by the BASF plant in Germany, due to gas leakage issues which halted the production levels for indefinite period. The market tightness was exacerbated by skyrocketing shipping freight throughout the quarter. Demand from the downstream paints and coating sector surged from the automotive sector while buyers maintained a firm stance due to the lockdown imposed in several parts of European region.
For the Quarter Ending December 2020
Asian countries had great recovery from COVID 19 during Q4 2020, which surged the demand of NPG from various downstream industries. Amid healthy demand, supply remained low due to shortage of feedstock Formaldehyde across the region. In India, several formaldehyde plants in North India were forced shut down due to environmental clearance issues. Consequently, feedstock Formaldehyde prices climbed from INR 147.5 USD per tonne in October to 205.1 USD per tonne in December. China also faced huge shortage of feedstock Formaldehyde due to lower imports of upstream methanol from Iran which consequently impacted PEG prices in China.
European countries were significantly affected by rapid spread of new COVID 19, due to the partial lockdown imposed across several parts in the region. Amid improvement in demand from domestic market, reduced Formaldehyde supply supported its prices across the region. In addition, Equinor’s major Methanol fire accident created huge shortage of upstream Methanol thereby impacting the prices of downstream derivatives like Neopentyl Glycol in Europe. Besides BASF, was heard increasing their NPG prices two times within a quarter in Europe amidst the sturdy demand and supply shortage.
North America witnessed speedy recovery in demand from industrial as well as from domestic sector during overall fourth quarter of 2020. The demand for NPG showcased significant improvements although the supply remained tight due to the force majeure declared on several plants under spate of hurricanes in the Gulf Coast in Q4 2020. As per our sources, BASF slightly increased its NPG prices in North America region by 0.08 USD per tonne in November 2020.