In early August 2024, the US Diethylene Glycol (DEG) market witnessed a notable upward price trend, with domestic DEG prices rising by 1.1%. This increase was primarily driven by tight supply conditions in the region. In mid-July 2024, several US DEG manufacturing plants faced shutdowns due to hurricane damage and power outages. This disruption significantly impacted DEG supply, tightening domestic inventory levels. The situation led to higher spot prices for DEG in the US as market feedback from a player indicated a shortage of DEG supply for July and anticipated tighter conditions for further in August. Buyers noted that DEG was unavailable in July, and August shipments were expected to reflect price improvements.

In July 2024, multiple Texas-based chemical and petrochemical companies, including Indorama Ventures, Dow Chemical, ExxonMobil/SABIC, and Indorama Ventures Public Company Limited, experienced force majeure due to power losses. Simultaneously, Formosa Plastics and Nan Ya Plastics in Point Comfort faced disruptions caused by hurricanes during the same period. These events collectively highlighted the industry's vulnerability to both natural and technical disruptions.

However, the global DEG market saw some relief from reduced production cost pressures, as feedstock ethylene oxide prices fell by 1% due to lower ethylene prices. Furthermore, a decrease in global crude oil prices contributed to lower production costs. As of August 2, 2024, West Texas Intermediate crude oil was priced at USD 74.99 per barrel, reflecting a drop of USD 3.59 from the previous week and USD 7.77 from the previous year. Additionally, the Shanghai Export Freight Index (SCFI) also fell by 3.6% to 3,542.44 points as of July 19, marking a two-week decline. Freight rates on major ocean routes decreased, with rates from Shanghai to Europe dropping by 1.01%, to the Mediterranean by 1.16%, to the US West Coast by 6.92%, and to the US East Coast by 1.32%.

Despite tight supply conditions, demand for DEG in the US remained stagnant, especially in the downstream resin manufacturing sectors during the early weeks of August. This muted demand was due to decreased inquiries from the downstream resin sector and associated to softness in end-use construction industry, where purchasing activity fell for the second consecutive month. Companies were reluctant to acquire additional inputs due to reduced orders and rising costs, attributing this weakness to deferred spending and investment in anticipation of the upcoming Presidential Election. Additionally, there was a significant drop in orders for investment goods such as plant and machinery, reflecting a recent slowdown in capital expenditure. Consumer goods producers also experienced a slight decrease in demand, and US construction spending unexpectedly declined.

Conclusively, analysts anticipate that DEG prices are likely to continue on the same upward trajectory due to low inventory availability and potential improvements in marine charges, influenced by ongoing geopolitical issues.