Quarterly Update on Global Polypropylene Glycol Market
For the Quarter Ending June 2021
In the North American region, the supply conditions of Polypropylene Glycol improved over Q1 due to improved plant operating rates in the upstream PDH units, refineries, and upstream crackers in the US Gulf region. However, there remained persistent shortage of the key feedstock Propylene Oxide. As the regional industrial infrastructure recovered from the impact of winter storm Uri, several manufacturers noted greater inflow of enquiries. Leading manufacturers surged the prices of almost all grades of Polypropylene Glycol (PPG) which proportionally impacted the prices of the product across the region. Demand was consistent with the downstream UPR sector.
Despite the slowdown of industrial and commercial activity due to second COVID-19 wave in India, the overall Polypropylene Glycol market outlook remained upbeat across Asia. India’s PPG-4000 rates crosses USD 3250/mt in June. Whereas in China, some manufacturers seemed reluctant to procure high-cost propylene oxide amidst rising inflation rate throughout China. As a ripple effect, several buyers side-lined and announced production cutbacks in the Chinese domestic market. Towards the end of Q2, new cases of delta variant found in the South China’s Guangdong port restricted the trading activities. In Japan, the price of Polypropylene Glycol gained by double-digits due to consistent offtakes from the downstream Polyester resin industries and continuously tight supply of the key raw materials.
PPG supply conditions in the European region remained constrained owing to the limited availability of upstream propylene oxide amidst turnarounds in several PDH units and refineries which further curtailed the production margins of Polypropylene Glycol manufacturers. Imports were limited from the North American region, forcing European buyers to be more flexible to procure goods from the China and other Asian countries. Demand was consistent from the downstream Polyester resins sector as the economies started to reopen in several parts of Europe. Hence the prices curved remained lifter throughout Q2.
For the Quarter Ending March 2021
During the first quarter of 2021, PPG supplies remained affected as a major raw material plant went for a maintenance turnaround, causing tightness in the feedstock availability, followed by extreme freeze weather conditions in the US gulf region resulting in several plants outages. Demand, however surged as the winter season hit the region which improved the consumption from the automotive and polyurethane sector. High Ethylene Oxide prices and firm feedstock proportionally surged the prices of PPG in the North American region.
The supplies of Polypropylene Glycol in Asia were tight, owing to limited availability of feedstock ethylene oxide, as several plants went for maintenance turnarounds, followed by sluggish import and feedstock availability from the Middle East region. During mid-February, amid the Chinese Lunar New Year holidays several plants went for maintenance shutdowns. Demand remained resilient throughout the quarter, as the consumption from the downstream polyurethane and automotive sector. Due to resurgence of COVID, followed by overseas trade barriers hiked the CFR prices of PPG in India holding a quarterly average of USD 1631/ton.
Supplies in the European region remained constrained throughout the first quarter, due to limited availability of feedstock, followed by a major portion of upstream supply being diverted towards polyols production. Furthermore, supplies tightened due to reduction in imports from the US as compared to the previous quarter and Middle East, as a major petrochemical plant declared turnaround in February, resulting in hiked prices of PPG. Demand remained firm, as offtakes from the PU and automotive sector reduced due to lesser automobile sales amid the lockdown.
For the Quarter Ending December 2020
A combination of drivers pushed up the PPG price curve during the second half of Q4 2020. Drop in upstream Propylene Oxide (PO) supplies due to scheduled maintenance and plant turnarounds at several manufacturing facilities raised the regional PPG offers. The beginning of Q4 marked a sharp resurgence in the demand of PPG from the downstream PU foams. Demand in China and India during the second half of the quarter was largely tepid with offtakes limited as buyers slowed restocking activity ahead of the year-end. PPG traded volumes stood low in lieu of the vessel shortages in the region. Polypropylene Glycol 6000 was traded between USD 1550-1630 per MT on CFR basis in the Indian markets, shedding the losses incurred in Q3.
Demand for Polypropylene Glycol (PPG) in the Americas was well-supported throughout Q4 2020 with the outlook turning optimistic towards the end of the quarter due to pent-up demand by the downstream foam manufacturers. Exports remained affected due to prolonged congestion at ports causing delayed delivery times in some regional ports. Higher Propylene and Propylene Oxide pricing pushed up the regional offers of several Propylene derivatives including PPG almost by double-digits. Players expressed concerns over suppressed production volumes during the first quarter due to planned maintenance at some upstream units.
In December, the region witnessed robust demand for polypropylene glycols (PPG) for the production of flexible foams and a sharp rise in prices due to constraints on the upstream availability. Shortage of shipping containers prompted buyers to report longer delivery times. Towards the end of the year, a tight Propylene availability impacted the production costs. Material shortage in the global market enabled some German players leverage opportunity and export volumes to some Asian economies. Some players showed urgency to trace persistent raw material volatility and propose logistical planning to predict any further fluctuations in price forecasts.