Global Diethylene Glycol Prices Escalates Further, Outlooks Seems Bullish

Diethylene Glycol, a critical raw material in the manufacturing of Polyester fibres (textile and clothing), PET and Antifreeze products, experiences a bullish price trend for the USA, Europe and Middle Eastern market in February 2024, driven by the numerous complexities from upstream, operations and logistics segment, which remains fail to cover the downstream demand.

In the USA, Diethylene Glycol prices increased by around 3.5% in February 2024, due to the growth in downstream demand amidst the tight supply. This is primarily attributed to the shortage in inventory like numerous key players shutdown the production units or reduced their operation capacities in early 2024. Like in USA, Dow Chemical company, Indorama Venture in Texas and Louisiana based Lotte Chemical Corporation reduced their operation capacity owing to the Freezing Cold weather. At the same time, Diethylene Glycol, demand remained high from downstream Polyester and Antifreeze sector as USA and European region crossed the extreme cold weather and improving macroeconomic indicators in January indicates an improvement in factory activities. These factors created a high supply demand gap coupled with the insufficient feedstock inventory that caused the key players to increase the product price. Indorama Venture increased USD 44/MT from 1st February 2024 at Port Neches, Texas and Clear Lake, MEGlobal, a global key player also increased Diethylene Glycol price from February 2024.

European market mirrors the same effect as USA, In February 2024, Germany experiences price surge of around 4% for Diethylene Glycol, due to the constrained supply of the material in the region and a significant rise in local demand. Concurrently, Diethylene Glycol feedstock, Ethylene Oxide price also inclined, notably 1.3%, leading to an increase in the production cost. Low port inventory and stock shortage in exporting countries are also attributed to the difficulties. A key player of Diethylene Glycol, Saudi Arabia, also followed the same trend. During the period, Diethylene Glycol price remained high, owing to the supply demand gap, notably a surge of around 4% amidst the global shortage of the product. To elaborate, the shutdown of Eastern Petrochemical company and Yanbu National Petrochemical Company (Yansab) due to the maintenance and Red Sea crisis respectively, proved a significant reduction in Diethylene Glycol feedstock inventory, leading to increase in export price.

Along with the upstream and downstream factors, logistics hurdles cannot be ignored. During the month, logistics interruption marks a huge effect in the disturbance of supply demand dynamics. Marine freight charges due to red sea crisis added a notable complexity since the Israel-Hamas conflict has erupted, concurrently, sequential protests in the European region since early 2024 are another pivotal point in transportation across the European borders.

To Conclude, the Diethylene Glycol market in the USA and Europe during the month was characterized by dynamic interactions among upstream factors, downstream demands, and supply chain dynamics. ChemAnalysts predict the same trend for both markets in the coming month, as the mentioned complexities are unlikely to get vanished soon from the market.