US Propylene Glycol Prices Show Upward Trend Amidst Supply Constraints

The Propylene Glycol prices showed an upward trend in August due to reduced supply in the USA domestic market with the slowdown of factory activity. The demand from the end-user food and pharmaceutical industries remained higher, further contributing to this trend. 

In August, the Propylene Glycol prices remained stable initially and then began an upward trend. At the start of August, certain Propylene Glycol manufacturers maintained prices at a stable level amid moderate demand, resulting in a balance being achieved in the market. Some Propylene Glycol facilities were closed in the middle of the month, reducing the supply in the field and supporting the center of the Propylene Glycol market's constant movement towards the high-end. In the last week of August, the overall uptrend of the Propylene Glycol market was restricted. As the prices of Propylene Glycol continued to rise, the market's wait-and-see sentiment gradually became more pronounced. Downstream new orders were traded on a wait-and-see basis, and the trading environment in the market weakened in comparison to the previous period.

In August, U.S. manufacturing shrank for the tenth consecutive month, but the rate of decline slowed, suggesting that the industry may be stabilizing at lower levels. This suggests that the reduced production activity in August resulted in a lower inventory level of Propylene Glycol among market manufacturers and retailers. However, compared to the previous month, the number of new orders and inquiries for Propylene Glycol increased from domestic and foreign markets, supporting the upward price trajectory.

The US economy continued to suffer with high inflation and consistent rate hikes by the US Fed Reserve. The motive of the Fed's interest rate hikes is to increase the cost of borrowing and investment, thereby lowering the aggregate demand for goods, services, and labor in the economy. However, the Fed held further interest rate hikes in August, which supported improved end-user demand, leading to an increase in the prices of Propylene Glycol.

As per the analysis of ChemAnalyst, the Propylene Glycol prices are expected to fall in the coming months as a result of a fall in demand from end-user industries combined with adequate inventory level among market providers, as the inflation is still high. The Fed has not ruled out additional rate increases, and that could still happen unless inflation slows further. This would support to cool the economy and bring the prices down. However, it is anticipated that Propylene Glycol prices might surge at the end of the last quarter with the increase of consumer confidence due to expected improvement in economic prospects in the USA.