Quarterly Update on Global Propylene Glycol Market
For the Quarter Ending June 2021
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.
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.
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
During the first quarter of 2021, Propylene Glycol supplies remained affected, carrying forward the previous disruptions. As in the first half of the Q1, a major plant was on a maintenance turnaround causing tightness in the feedstock accessibility, further the extreme freeze weather conditions throughout US gulf region resulted in production disruptions in the mid-quarter. Demand, however surged as the winter season hit the region, thereby improving the consumption from the antifreeze sector. Surged demand and constraint supplies hiked the prices of Propylene Glycol in the North American region. In March, Dow Chemicals increased the prices of Propylene Glycol by USD 22/Ton for both the grades.
Supplies of Propylene Glycol in the Asia Pacific region were tight, owning to limited availability of the feedstock, due to planned plant turnarounds at several production plants, followed by slump in imports from the Middle East. During mid-February, the production was further constrained as a result of supply side issues due to the Chinese New Year holidays. Demand remained spiked throughout the quarter, as the consumption from the downstream antifreeze and pharma sector surged. Inclined feedstock cost and low production spiked the prices of Propylene Glycol throughout the region. In India, the prices in March were recorded at USD 1399/ton on CFR basis.
The supplies in the European region remained constrained throughout the Q1 2021, due to the limited availability of feedstock, followed by the major portion diverted towards the polyols production. Furthermore, supplies remained pressured under 50% decline in imports from the US over the previous quarter and Middle East, where a major petrochemical plant declared turnaround in February. However, the demand spiked, as the consumption from the antifreeze sector increased amid due to the winter season.
For the Quarter Ending December 2020
The supply of Propylene Glycol remained short in Q4 2020 due to turnarounds at the upstream Propylene Oxide facilities which trimmed its accessibility, thereby hampering the production of both Mono-Propylene Glycol and Di-Propylene Glycol. Squeezed supply of the industrial grade Propylene Glycol from China, resulted in regional shortfall of the product. The quarterly demand from the anti-freeze sector remained well supported from the Aviation Industry as the region experienced chilly winters. In the Indian market, the Propylene Glycol prices witnessed slight decrement in the first half of Q4, then constant increment throughout the quarter maintained an average price USD 1275/MT and is estimated to rise in upcoming months.
The European Propylene Glycol market faced tightness in Q4 mainly because of reported shortage of the feedstock Propylene Oxide as its volumes were heard getting diverted towards the polyols production. Sudden spike in the product prices across the Asian markets and seasonal hurricanes in the US surged trade enquiries from the European region. Demand for Di-Propylene Glycol from the fragrance sector remained healthy and the pharmaceuticals sector witnessed an enormous spike for combating the spreading of the COVID-19 virus. Demand for Mono-Propylene Glycol from the anti-freeze sector surged during winters despite grappling to combat uncertainties due to the second lockdown imposed across Europe because of new COVID variant. This led to panic regarding securities of supply despite appreciable demand outlook.
During the first half of Q4, Propylene Glycol demand tightened due to moderate weather conditions throughout the US and travel restrictions due to surging COVID-19 cases. Early in Q4, supply in the US Gulf region was impacted by the production issues reported at the manufacturing facilities. In October, LyondellBasell declared force majeure at its upstream Propylene Oxide facility in Pasadena (Texas) which significantly impacted the production of Propylene Glycol and other downstream products in the region. Some facilities which were damaged by ‘Hurricane Laura’ in late August were heard getting repaired by the mid of Q4, thereby soothing of product supply late in the quarter. By the end of Q4, major players observed considerable improvement in the demand from the antifreeze sector due to winter season. However, demand remained pressured compared to the previous year.