Bearish Market Sentiments Trigger a Fall in Polyethylene Glycol Prices in the Middle East

The Polyethylene Glycol market experienced a downturn in the Middle Eastern region in October 2023, with prices witnessing a significant drop of nearly 12%. The supplies were excessively available amid a declining consumption rate from domestic and international consumers.

As per the sources, Saudi Arabia's manufacturing Purchasing Manager's Index rose again and remained high at the end of September 2023, indicating further expansion in the manufacturing sector activities. Consequently, the supply rates of Polyethylene Glycol remained firm in the market during the month.

However, the demand for PEG 200 from the downstream industries dampened noticeably in October. Simultaneously, orders declined from international importers like India as consumption rates remained moderately low from the PEG 400 manufacturers amid stabilization in demand for eye drops from the consumer end and adequate availability of supplies in the market.

During the first half of October, the cost support on feedstock Ethylene declined amid ease in speculations around the supply chain disruptions in the Middle East amid conflict between Israel and the Palestinian Islamist Group. Consequently, Polyethylene Glycol production costs fell and remained low in October 2023.

According to the ChemAnalyst data sources, the Polyethylene Glycol 200 prices in Saudi Arabia hovered at USD 950/MT at the end of October 2023.

Previously, in September 2023, prices increased marginally as supply rates of Polyethylene Glycol were affected due to inadequate availability of feedstock supplies amid Crude Oil production cuts by OPEC+ at the beginning of the month. The Yanbu National Petrochemical Company, which has the capacity to produce 1.38 MMTPA of feedstock Ethylene, experienced an unexpected shutdown from August 14, 2023, to early September 2023. This incident had a significant impact on the production levels of Polyethylene Glycol. It negatively affected the domestic production rates of Polyethylene Glycol. After that, production rates improved, but consumption rates remained moderate in the end-user industries. The escalation in upstream costs stabilized during the second half of September, and upstream cost support eased on Polyethylene Glycol. As per the sources, the ship traffic index of Saudi Arabia has increased by 8.06% during the past year.

As per the ChemAnalyst estimation, the Polyethylene Glycol market will remain moderate during November 2023 amid ample availability of supplies and moderate restocking practices by the downstream buyers and importers. On the contrary, the feedstock prices are firm and will incline due to increases in upstream Crude Oil prices during winter and high demand from the buyers. So, the production costs will increase in the upcoming weeks, and supply rates may remain tight to the international importers towards the end of the year.