In mid-February 2025, Cellulose Ether prices remained stable despite a marginal 0.2% depreciation, as demand conditions stayed subdued. However, cost pressures persisted, driven by a 2% rise in feedstock Propylene Oxide prices during the first half of February. Despite this, the market-maintained stability due to the absence of plant shutdowns and no significant logistical disruptions in Europe. Demand for Cellulose Ether remained sluggish, particularly from the downstream coatings industry, as the construction sector continued to underperform. Suppliers, however, reported ample inventories across warehouses, with some even carrying over stocks from January 2025, which may have further led to minor fluctuation in the prices of Cellulose Ether

The largely stable market dynamics of Cellulose Ether were further reinforced by a leading manufacturer maintaining contract prices from January 1 to June 30, 2025, ensuring price stability for the first half of the year. However, in the downstream construction sector, sentiments remained moderate to negative, as the slowdown in construction activity persisted into 2025. The weakness in the construction industry stemmed from a decline in housing permits, which had already reached historically low levels in 2024. Excluding permits related to existing buildings such as renovations and extensions, permits for newly constructed apartments dropped by 19% to 172,100 units, according to market participants.

The steepest declines were seen in the single-family housing segment, which accounted for about a quarter of total permits and was often built by private individuals. This further weakened demand for Cellulose Ether from the downstream coatings industry, intensifying concerns over prolonged market sluggishness. Other industries, such as the beverage sector, also exhibited pessimistic business conditions. In Germany, in particular, economic deterioration continued into February 2025, following the post-election period, with market participants anticipating only slight improvement by March.

Additionally, consumer confidence in Germany continued to weaken, with the income expectations index dropping 4.3 points to a 13-month low of -5.4 in February. This further contributed to negative sentiment surrounding procurement activities in the Cellulose Ether market, as buyers remained hesitant to make large-volume purchases amid economic uncertainties.

On the export front, overall conditions remained for Cellulose Ether seemed stable, showing improvement from January 2025. Most terminals witnessed yard utilization rates of 75% to 80%, leading to minor operational pressure. However, no significant disruptions were reported, despite limited arbitrage between in and out of Europe.

Looking ahead, Cellulose Ether prices are expected to see slight increments in March 2025, as suppliers may attempt to pass higher feedstock Propylene Oxide costs to downstream customers. However, one major European producer has kept contract prices unchanged for the entire first half of 2025, which could limit price hikes. Despite this, demand recovery expectations remain weak, with most market players expressing continued pessimism regarding the European Cellulose Ether market.