Across key global markets, the price of Neopentyl Glycol (NPG) has experienced upward pressure for the week ending on November 8 due to feedstock cost increases, logistical challenges, and sustained demand in the construction and coatings sectors. In North America and India, supply constraints and strong domestic demand have contributed to price rises, while in Europe, port congestion and subdued construction activity have led to a more balanced outlook.

NPG prices in North America rose by 1% in the week ending November 8, driven by higher feedstock costs, including a 3.5% increase in Formaldehyde prices, which boosted production costs. Additionally, a slight supply constraint of domestically produced NPG contributed to the price hike.   While the U.S. manufacturing sector showed signs of easing contraction in Q4, ongoing labour negotiations with the International Longshoremen’s Association (ILA) at East and Gulf Coast ports continue to disrupt supply chains, with shippers avoiding these areas due to potential strikes. These uncertainties are likely to keep prices volatile and impact supply stability. Demand for NPG remained steady, primarily supported by the paints and coatings sector, which has seen a 5% growth in market value since mid-2023. As demand stays stable and supply constraints persist, NPG prices are expected to remain influenced by these dynamics.

Similarly, in the European NPG market witnessed a price surge this week, reversing a period of stagnation. The price increase was driven by rising Formaldehyde prices, a key feedstock for NPG production, which led to higher production costs.  While production activities in Germany remained steady, logistical challenges, such as port congestion and delivery delays at Hamburg’s automated Container Terminal Altenwerder (CTA), continued to disrupt supply chains. These delays, caused by the terminal's modernization, along with disruptions in the Red Sea and U.S. port strikes, have further increased shipping costs. Demand from the construction sector, however, remained subdued, especially in the residential and commercial segments, due to a slowdown in Germany’s construction activity and rising costs. This has led to a more balanced supply-demand outlook for NPG. Despite the challenges, the market remains stable, with future price movements dependent on global disruptions and the performance of downstream sectors.

In India, NPG prices rose by 0.4% during the current review week, reversing the stability observed in the previous week. This increase was primarily driven by sustained demand from the construction sector, which remained robust despite expectations of a post-festive slowdown. Surpassing market activity expectations prompted traders to raise prices. Domestically produced NPG supply remained stable, supported by manageable input costs and a rebound in manufacturing activity, particularly in October 2024. While the export sector faced logistical challenges, including delays at Kattupalli Port in North Chennai, strong domestic demand helped maintain upward pressure on NPG prices. The construction sector's resilience, bolstered by heightened consumer spending during festivals like Navratri and Diwali, fuelled continued NPG demand. Despite rising construction costs, the sector’s strength has ensured steady consumption of NPG, especially in the production of coatings and resins.

As predicted by ChemAnalyst, NPG prices are expected to remain volatile, influenced by supply chain disruptions, feedstock price fluctuations, and the performance of key downstream industries.