Global Propylene Glycol Prices Exhibit Mixed Trend in September 2023 Amidst Market Volatility

Propylene Glycol prices in the global market showed a mixed pattern during September. The month began with a downward trend, but prices rose in the final week of September. At the beginning of September, the trading environment in the market was light, with few new orders and cautious downstream demand. The Propylene Glycol market center has shifted to the lower end as supply and demand weaken. However, the market demand from end-user industries increased at the end of September, supporting the rise in Propylene Glycol prices. Furthermore, raw material costs, such as Propylene Oxide, also increased, followed by increased purchases, increasing Propylene Glycol prices.

In September, China's manufacturing Purchasing Managers' Index (PMI) was 50.2, returning to the expansion zone. This data shows that market demand in the manufacturing sector has gradually improved, and company operations have risen quickly. However, sluggish foreign demand continued to weigh on the outlook even as output grew, maintaining the Propylene Glycol market on the weaker side. However, when the golden week and the mid-autumn holiday drew near, more consumers were making queries, raising Propylene Glycol's cost. Propylene Glycol is a liquid component commonly used as a humectant, preservative, and solvent in the food and beverage industries. The Chinese food and beverage industry has witnessed a surge in consumption due to rising domestic tourism for the Golden Week holiday, resulting in a higher demand for Propylene Glycol in the latter half of September, increasing prices.

The United States economy has been remarkably resilient despite dramatically increasing borrowing prices. Consumer confidence fell in September, especially about the outlook, as expectations remained that interest rates would remain high for a lengthy period. The Federal Reserve kept its benchmark key interest rate unchanged in the 5.25%–5.50% range. New orders declined for the sixth month in September, but at the slowest pace, causing Propylene Glycol prices to fall. Similarly, consumer confidence was down across Europe, with sentiment in Germany declining slightly. The reasons for this include persistently high inflation driven by rising food and energy prices, which strained buying power. Germany's industrial sector, which accounts for around one-fifth of the country's economy, remained in a slump in September owing to sluggish demand and quickly declining output, leading to a drop in Propylene Glycol prices. However, the cost of air and ocean freight soared around the end of September in anticipation of a lengthy holiday in China, disrupting the global supply chain and driving up the price of Propylene Glycol in the USA and European markets. 

According to ChemAnalyst, there is an expectation for Propylene Glycol prices to rise in the coming months. However, the increase is anticipated to be moderate, driven by continuous demand from end-users despite limited supply. Furthermore, trading activities are expected to become more efficient, which could further contribute to the growth of the Propylene Glycol industry.