Propylene Glycol Prices Plummet in the USA amidst Sluggish Downstream Demand

Beginning in November, Propylene Glycol prices in the US continued to decline, following a trend that has been observed during the previous few months. This compressed situation of the Propylene Glycol market in the US is attributed to subdued demand from end-user industries, a reduction in inflationary pressures, and a surplus of supply with the market players. Additionally, the depreciation of the dollar against the Chinese yuan increased import costs for end-consumers, resulting in reduced domestic demand for Propylene glycol across the North American market and adding to the overall decline.

As November commenced, the domestic Propylene glycol market witnessed a sustained low pricing environment, leading to a standstill in supply and demand dynamics and restricted price variations in the Propylene glycol market. Presently, downstream demand for Propylene glycol remains subdued, with limited potential to significantly impact the market positively. Market inquiries for Propylene glycol are scant, and the generation of new orders is constrained. On the cost front, the propylene oxide market, a key raw material, is experiencing weakness, providing limited support to the cost structure of Propylene glycol. Regarding the supply aspect, some devices in the Propylene glycol sector are experiencing delayed start-ups and remain in a state of shutdown and maintenance due to insufficient follow-up of downstream demand. Moreover, the Propylene glycol market is presently positioned at a low level, with factories predominantly maintaining stable quotations.

In the United States, inflation remained unchanged in October compared to the previous month, offering a positive indication that persistently high prices may be loosening their impact on the U.S. economy and signalling a potential signal for the Federal Reserve to halt its interest rate hikes. According to the latest data from the U.S. Bureau of Labor Statistics, the consumer price index rose by 3.2% over the past 12 months, a decrease from the 3.7% reported in September. The notable reduction was largely attributed to lower gasoline prices, resulting in an overall decline in transportation and business costs, thereby contributing to the current downward trend in propylene glycol prices in the USA. Furthermore, consumer confidence in the United States showed further deterioration in November, as the Consumer Confidence Index dropped to 60.4 from 63.8 in October. This figure fell below the market's anticipated expectation of 63.7, providing additional support for the decline in Propylene glycol prices.

According to ChemAnalyst analysis, the Propylene glycol market is expected to remain weak due to sustained lower demand from end-sectors, coupled with ample supply in the market. The Federal Reserve's potential decision to maintain higher interest rates by the end of the year is likely to keep overall market demand subdued, contributing to a further decline in Propylene glycol prices.