US Propylene Carbonate Prices Rise Amid Supply Pressure and EV Market Optimism

Texas, USA: US Propylene Carbonate prices have steadily risen throughout August 2024 as the upstream markets have pressured production costs. Upstream Propylene prices in the US market saw a significant rise recently. Factors such as inflation, energy price fluctuations, and global market uncertainties have contributed to the price volatility. Higher production costs for Propylene-based products like Propylene Carbonate are resulting in increased prices for end customers.

The US Propylene market maintained a bullish trajectory in August, driven by supply constraints. Rising crude oil prices, fueled by Middle East tensions, falling US stockpiles, and shifting geopolitical factors, significantly raised Propylene production costs and eventually for Propylene Oxide and Propylene Carbonate as well. The surge in propane prices, despite an increase in propane stocks, resulted in higher production costs for propylene, a key feedstock. Planned maintenance at propane dehydrogenation plants and reduced US exports further tightened the domestic propylene supply, reinforcing the bullish sentiment.

Moreover, market uncertainties were further amplified by concerns over an intensified hurricane season, contributing to the price escalation. However, in the last week of August, propylene prices saw a sharp decline, driven by an influx of competitively priced imports from Asia and the Middle East, which put significant downward pressure on domestic prices including for Propylene Carbonate. The resumption of operations at some production units that had been undergoing maintenance also helped ease supply constraints. Moderation in demand, coupled with increased imports and improved supply, shifted the market dynamics, leading to a reversal of the previous upward trend. Overall, elevated costs and a tight supply of propylene have impacted the production of Propylene Carbonate, pushing its prices upward.

In both Europe and the US, raw materials for lithium-ion battery manufacturing, including Propylene Carbonate, are facing challenges in scaling up production due to emerging industrial performance. To reduce dependency on Chinese supply, both regions are implementing policies aimed at enhancing energy security for battery materials like Propylene Carbonate. Although electric vehicle sales have recently declined, the rate of decrease has slowed. According to sources, US customers purchased 122,997 plug-in vehicles in July, including 100,677 battery electrics and 22,329 plug-in hybrids, marking a 1.2% drop compared to the same month last year. However, EV sales saw an 11.3% surge in the second quarter of 2024 compared to the previous year, reaching a record high of 330,463 units. These trends indicate that market players remain optimistic about prospects, which will benefit battery raw materials like Propylene Carbonate.

As per the pricing intelligence at the ChemAnalyst database, the prices of Propylene Carbonate are anticipated to demonstrate a further upward trajectory in the upcoming weeks as the demand prospect for Propylene Carbonate is anticipated to bloom further.