Propylene Glycol Prices Decline in US and China Market, Germany Shows Bullish Trend

The global market for Propylene Glycol witnessed a diverse range of price fluctuations during the month of October 2023. Notably, prices in the United States and China witnessed a decline, attributed to reduced costs of raw materials, sluggish demand, and an abundant supply of Propylene Glycol within the market. On the other hand, Germany observed a price rise, which can be attributed to a resurgence in consumer confidence driven by a notable decrease in inflationary pressures.

Manufacturing activity in China decreased at the start of October due to yearly holidays in China. The entire nation came to a standstill, businesses suspended their operations, and the production and transportation of manufactured goods were temporarily halted, which kept the Propylene Glycol market stable during this period. Following the vacation, the trading environment in the Propylene Glycol market was weak, and downstream was carefully acquiring based on demand. The downstream industries, including unsaturated resin and elastic polyether, demonstrated a cautious approach toward the market. A restrained purchasing sentiment resulted in a limited influx of new orders for Propylene Glycol. Overall demand lacked adequate support, and several Propylene Glycol producers and suppliers lowered profits to ship. As a result, the overall focus on the Propylene Glycol market waned.

Furthermore, the market for propylene oxide, a main raw ingredient, varied and marginally fell. The raw material propylene market was weaker, and cost support was diminished. The supply side was mostly constant, with a few units fluctuating. The purchasing excitement for propylene oxide was ordinary, and several firms had amassed inventories. The market for propylene oxide remained stable but weak, which further contributed to the downward trajectory of Propylene Glycol prices.

The US economy is expected to slow in the next few months, with decreasing domestic consumption and consumer spending accounting for about two-thirds of economic output. The economy has suffered due to Ukraine's invasion and widening geopolitical schisms, and it now faces extra uncertainty due to Israel's fight with Hamas militants. In October, consumer confidence in the United States decreased for the third month in a row as increasing interest rates and ongoing inflation weighed on consumer optimism, supporting the reduction in Propylene Glycol prices. According to preliminary data, consumer confidence fell from 68.1 in September to 63 in October, falling short of the projected 67.2 and reaching its lowest level since June.

Since the start of Russia's all-out invasion of Ukraine, German inflation has hit its most favorable level, signaling a crucial turning point in reducing the heavy inflationary pressures that have beset Europe's economic powerhouse. This gives customers a sense of relaxation, leading to a rise in market demand for Propylene Glycol, which drives up prices in Germany.

According to ChemAnalyst, Propylene Glycol prices are projected to fall in the upcoming months due to a steady reduction in demand from end-consumers and ample market supplies. Furthermore, the trading environment may improve, ensuring an adequate supply of Propylene Glycol in the worldwide market while maintaining unfavorable market dynamics.