European Glycol Ether Market Stabilizes Despite Production Drop and Upstream Cost Surge

The Glycol Ether market remained stable in August 2023 amid a decline in production rates and an increase in upstream cost support from feedstock Ethylene because of the escalation in production costs due to high upstream prices.

The market sentiments for Glycol Ether have been bearish for the past couple of months. Inventories were adequately available due to moderately low orders for Glycol Ether from the international importers and sluggish offtakes from buyers from the past few months due to reduced manufacturing activities and consumption rates from the downstream industries. In June, the hike in bank interest rates by the European Central Bank made the buyers conscious, and they avoided any unnecessary trading activities. Consequently, consumers reduced consumption rates and orders for cleaning agents and daily care products. The Glycol Ether prices dropped amid destocking practices by manufacturers and softened global demand from end-users towards the end of the second quarter of 2023. Furthermore, the consumption rates of Glycol Ether were low from downstream paint and coatings producers due to sluggish activities in the construction sector.

Meanwhile, the manufacturing sector contracted like in the past months, and the Eurozone manufacturing Purchasing Manager’s Index decreased again during August 2023. As per sources, the high energy costs and a simultaneous decline in demand from buyers resulted in a slowdown in the Eurozone growth.

Simultaneously, the decrease in the upstream Ethylene prices during the month due to increased supplies amid low consumption rates from the downstream value chains reduced the feedstock Ethylene Oxide prices and production costs of Glycol Ether. Simultaneously, the decline in input costs due to decreased Natural Gas prices amid subdued demand and high inventories eased the cost support on Glycol Ether.

As per the ChemAnalyst data sources, the Glycol Ether prices in Germany have decreased almost 2% since the beginning of Quarter 3 of 2023. At the end of August 2023, Ethylene Glycol Monobutyl Ether prices hovered at USD 1300/MT.

Meanwhile, in Asia, orders improved for USP grade Glycerine and Glycerol for the Pharma sector due to increased cough syrup and throat lozenges consumption rates in the country with the arrival of monsoon and affected immunity rates of consumers. Simultaneously, heavy rainfalls during the monsoon affected the supply chain activities.

As per the analysis, the Glycol Ether prices will remain firm towards the end of quarter 3 of 2023. The key reason is the low production rates amid the economic slowdown in the region and high upstream Ethylene costs due to the escalation in upstream Naphtha prices. Meanwhile, the demand for Glycol Ether will moderate from the buyers.