Propylene Glycol Market Sees Global Price Plunge Amid Falling Input Costs

Propylene Glycol prices have been on a steady decline across international markets over the course of June thus far, and this softening is expected to continue into the culmination of the month. This decline is mainly due to end users having ample Propylene Glycol inventory, reducing the need for new purchases. Consequently, buyers are adopting a more cautious stance, resulting in fewer market transactions and driving down Propylene Glycol prices.

One key factor contributing to the decline in Propylene Glycol prices was the drop in the cost of propylene oxide, its primary raw material, which fell to a low level early on. Although inventory pressure was manageable, downstream demand remained average, with buyers mostly fulfilling immediate needs. This resulted in lower manufacturing costs for Propylene Glycol, aiding in its price decline. Additionally, Propylene Glycol is commonly used in antifreeze solutions. As summer brings warmer temperatures, the demand for antifreeze products naturally decreases, leading to a potential reduction in demand for Propylene Glycol and further contributing to its price drop in June.

China's National Bureau of Statistics (NBS) recently released statistics that revealed an unexpected drop in the nation's industrial activity in May. The official manufacturing Purchasing Managers' Index (PMI) dropped to 49.5, down from 50.4 in April, marking a three-month low. The primary drivers behind this month's decline were contractions in new orders and new export orders, both of which had experienced two months of expansion before contracting. This downturn has also played a role in the ongoing decrease in Propylene Glycol prices.

The eurozone economy is recovering from a recession at a faster pace than anticipated, although growth remains modest. Recent data from Eurostat reveals that consumer prices in the eurozone increased by 2.6% year-on-year in May, up from 2.4% in April and exceeding the 2.5% forecast. Germany experienced a 2.8% increase in consumer prices, France saw a 2.7% rise, Italy had a 0.8% increase, and Spain witnessed a 3.8% increase. This persistent inflationary pressure continues to dampen consumer sentiment, which in turn is contributing to the decline in Propylene Glycol prices. Similarly, U.S. consumer sentiment fell in June for the third consecutive month as consumers became more pessimistic about their personal finances and remained concerned about persistent inflation, further reinforcing the downward trajectory of Propylene Glycol prices.

According to ChemAnalyst analysis, the prices of Propylene Glycol are continuing to decline due to consistently weak demand from end-user industries, a sluggish feedstock market, and ample supply in the market. In response to these conditions, market participants are offering lower quotations, further driving down prices.