Stable European Polyethylene Glycol Prices: A Result of Moderate Purchasing Strategies

In February 2024, the Polyethylene Glycol trend was stable, and prices witnessed a marginal increment of 0.8% amid moderate demand dynamics and inadequate availability of supplies due to affliction in production rates.

The production rates of Polyethylene Glycol were impacted due to limited availability of feedstock Ethylene, attributed to heightened risks of supply chain disruptions amidst ongoing tensions in the Middle East. This was exacerbated by a missile attack on an oil tanker off the coast of Yemen, leading to increased traffic along global shipping routes and consequently raising production costs for Polyethylene Glycol.

The Polyethylene Glycol orders were moderate for PEG 200 for fruit coatings amid consistent consumption due to increasing temperatures in the Northern Hemisphere and a rise in food prices amid an escalation of 3.1% in food inflation during the month. As per the sources, in February 2024, the Eurozone's Manufacturing Purchasing Manager's Index declined marginally compared to the previous month and remained below 50, indicating a slowdown in manufacturing sector activities. New orders and buying activities from regional buyers witnessed slight reductions during the month. Meanwhile, inquiries for Polyethylene Glycol remained moderate from the Pharma Sector.

However, in the prime month of 2024, the Polyethylene Glycol price trend showcased bearish sentiments, and quotations were reduced noticeably by 8% in the European region due to sluggish demand from buyers. At that time, production rates of Polyethylene Glycol were firm in Europe. Meanwhile, inventory levels rose in the market due to affliction in supply chain activities because of trade tensions and geopolitical uncertainties. Supply chain operations experience disturbances due to heightened ship congestion along shipping routes, resulting from attacks on vessels and oil tankers traversing the Red Sea in the Middle East.

At the end of February 2024, the Polyethylene Glycol PEG- 200 FD Hamburg prices witnessed USD 1300/MT, according to the ChemAnalyst data sources.

As per the ChemAnalyst assessment, the Polyethylene Glycol price trend will showcase bullish movement towards the end of quarter 1 of 2024. The key reason for this is the affected production rates of Polyethylene Glycol in the regional manufacturing units due to the limited availability of feedstock Ethylene supplies. Consequently, the availability of stocks will be inadequate to fulfil the market demand, which is likely to increase from various end-user industries in the upcoming weeks. The stocking activities will also increase from the buyers before the commencement of the second quarter of 2024.