The prices of propylene glycol in the USA are anticipated to drop in March 2025, influenced by several factors. This decline is likely influenced by reduced propylene glycol demand from downstream sectors, coupled with ample supply within the domestic market. As a result, market participants might offload their inventories at lower rates, contributing to a bearish market outlook.

Key Takeaways:

• Economic uncertainty and inflation are causing buyers to be cautious.
• The approaching end of winter will reduce demand for antifreeze and de-icing fluids.
• Potential tariffs imposed by the US on trading partners could disrupt trade flows and reduce demand.
• Diminished export opportunities may increase US production costs.

Additionally, demand for propylene glycol from industries such as pharmaceuticals, cosmetics, and food processing has shown signs of moderation, with buyers taking a cautious approach amid economic uncertainty and inflationary concerns. This weaker demand outlook is expected to weigh on prices, particularly as many buyers continue to work through existing inventories rather than placing new orders.

One of the primary factors driving the expected price decline is the moderation of the winter season, which typically reduces demand for propylene glycol-based antifreeze and de-icing fluids. As temperatures rise, consumption from the automotive, aviation, and transportation sectors is likely to ease, leading to a slowdown in bulk purchases. This seasonal shift historically results in lower procurement activity, contributing to downward pressure on propylene glycol.

The imposition of tariffs by former President Donald Trump on key trading partners such as Canada, Mexico, and China could significantly impact trade dynamics, ultimately leading to a decline in U.S. propylene glycol demand. These countries are among the largest buyers of U.S. goods, and higher tariffs could disrupt trade flows, making USA products less competitive in these markets. As a result, demand for U.S.-produced propylene glycol from Canada and Mexico—both major importers—could weaken, as industries in these nations turn to alternative suppliers or reduce consumption due to increased costs.

Moreover, China’s potential retaliation with tariffs on U.S. exports could further dampen demand. If China imposes levies on chemicals, pharmaceuticals, or other industries that rely on propylene glycol, U.S. exports to the region could decline, reducing overall sales volumes for domestic producers. This decline in international demand, coupled with existing domestic supply, could create a market surplus, forcing U.S. suppliers to lower propylene glycol prices to maintain competitiveness.

In addition, diminished export opportunities may drive up production costs for U.S. manufacturers due to supply chain disruptions, further straining market dynamics. This could contribute to inflationary pressures in the U.S., prompting consumers to adopt a more cautious approach to spending until the situation becomes clearer.

Overall, propylene glycol prices are likely to stay subdued in Q2 2025, driven by ongoing weak demand from end-user industries. Additionally, trade uncertainties and limited export opportunities could exert further downward pressure on prices, potentially keeping the market in a bearish phase.