North America
Prices of DPGME observed mixed sentiment in Q4FY23 in the North American region. In October, Dipropylene Glycol Monomethyl Ether (DPGME) prices in the USA saw a significant decline, driven by prices stable feedstock propylene prices. The construction industry faced reduced demand due to higher mortgage rates. Huntsman's reported attributed revenue decline to lower sales volumes and prices, especially in construction-related sectors. Oversupply and low demand led to ample inventories, pressuring dimethyl sulphate prices, while stable feedstock propylene costs mitigated production expenses.
November witnessed a notable increase in DPGME prices in the USA, attributed to high demand from the automobile and paint industries, creating a supply-demand imbalance. Freight charges rose due to Panama Canal disruptions, impacting Asian imports. The surge in DPGME prices was linked to increased spending on home renovations, festive season preparations, and robust demand from the automotive sector. December saw a further increase in USA DPGME prices, influenced by strengthened Asian imports and heightened demand from the paint and coating industry, driven by increased automotive and construction activities.
Despite disruptions in shipping routes and port congestion, the USA construction industry added jobs, reflecting resilience. The surge in DPGME prices was fueled by a supply-demand gap, shipping challenges, and increased demand from construction and automotive sectors. Overall, the three-month period portrayed DPGME market dynamics influenced by fluctuating feedstock prices, demand shifts in construction and automotive sectors, and external factors impacting supply chains and freight costs. As of December, DPGME prices in China were assessed at USD 1640/MT CFR Los Angeles.
APAC
In Q4FY23, Dipropylene Glycol Monomethyl Ether prices in APAC experienced a mixed trend. In October, DPGME prices in China declined due to oversupply and sluggish demand in the construction industry, despite a surge in feedstock propylene prices. Major propylene plants underwent maintenance turnarounds, leading to high inventories and discounted pricing before the shutdowns. The slowdown in downstream construction, evident in reduced land purchases by real estate developers, contributed to decreased demand. Huntsman's Q3 report indicated reduced earnings in the Products division, primarily linked to lower sales volumes and prices, reflecting a broader decline in construction and industrial sectors. In November, the Chinese DPGME market showed resilience amid challenges from weakened feedstock (propylene oxide) and low crude oil prices. Substantial propylene imports supported inventory stability, while a decline in feedstock propylene prices in the USA influenced China's pricing dynamics. Strong demand from importing nations, particularly in the automobile sector, contributed to a surge in DPGME prices. The imbalance between supply and demand, coupled with increased inquiries from overseas markets, drove the upward price trend. In December, Chinese DPGME prices increased, supported by strengthened cost from propylene and heightened demand from the paint and coating sector. Despite the economic downturn, increased orders from the automotive industry led to improved market conditions. China's automotive industry achieved significant growth in 2023, with unprecedented car production and sales. The surge in dimethyl sulphate prices in December was driven by supply-demand imbalances and a decrease in inventory levels. The escalation in feedstock propylene prices also contributed to the upward pressure on DPGME prices, marking a multifaceted market dynamic in the final quarter. As of December, DPGME prices in China were assessed at USD 1510/MT FOB Qingdao.
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Europe
Prices of DPGME in the European market observed mixed sentiment in Q4FY23. October saw a notable uptick driven by robust international demand, particularly from the downstream propylene industry, and the electric car revolution in Europe. The surge in downstream propylene products' demand left a lasting impact on the European Propylene market. November maintained a consistent supply with expensive imports sustaining a bullish trend. Steady demand from DPGME and feedstock Propylene industries, coupled with elevated production costs and costly imports, contributed to higher prices. The bullish trend was further fueled by robust demand for feedstock Propylene, emphasizing the influence of the electric car revolution. However, December marked a downturn as lackluster downstream demand and a tepid hoarding sentiment led to a decline in prices. Reduced production costs, linked to lower feedstock propylene and crude oil prices, added downward pressure. Contraction in the manufacturing sector, notably in Austria, Germany, and France, exacerbated challenges, reflecting a decrease in output, new orders, and export sales. Germany's economic struggles had broader implications, intertwining supply, demand, and external economic factors, creating a complex market landscape. The decline in demand, influenced by Germany's economic challenges, contributed to a region-wide price decrease, with the ongoing reduction in Crude Oil value further impacting the supply chain dynamics across Europe. The intricate interplay of supply, demand, and economic factors calls for cautious market navigation in the coming months. As of December, DPGME prices in Germany were assessed at USD 838/MT, CIF Hamburg.
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