Europe Sees a Drop in the Cost of Neopentyl Glycol Due to Low Demand
- 15-Feb-2023 6:13 PM
- Journalist: Motoki Sasaki
The price of Neopentyl Glycol has been falling for the past few weeks in the European market due to geopolitical tensions, high-interest rates, moderate inflation, and weak buying sentiments in the region. These are the primary factors driving the petrochemical markets, including Neopentyl Glycol in Europe.
Since December 2022, the region has experienced weak demand from the construction and paints & coatings industries. Natural gas prices are also falling due to Europe's abundance of availability and high inventory. Moreover, Europe's supply chain has not been significantly disrupted during the material delivery. The stable freight costs bolstered the downward price trend for Neopentyl Glycol.
Neopentyl Glycol orders from the end-use industry fell in January 2023 and will continue to drop in February 2023 due to the lower consumer interest in the region. Despite the ongoing demand pressure brought on by rising interest rates and skyrocketing prices for other commodities, the German construction industry remained in contraction territory.
Recently, interest rates were raised by 50 basis points by the European Central Bank (ECB). The Governing Council anticipates raising interest rates by 50 basis points more at its March 2023 monetary policy meeting. Maintaining low-interest rates will eventually decrease inflation because they reduce demand and eliminate the possibility of an ongoing upward shift in inflation expectations.
The ChemAnalyst found that Neopentyl Glycol cost around USD 1950/MT FOB Hamburg, with a 2% weekly decline through the week ending on February 10, 2023.
As per ChemAnalyst, Neopentyl Glycol prices are expected to decline in Europe until Q1 of 2023 due to the weak demand from the downstream industries. The experts anticipated that the cost of Neopentyl Glycol would drop by 1% to 2% in February due to the European market's low buying trend. The consumer confidence level is improving, and the manufacturers believe the market will improve shortly.
