The Urethane Blog
June 5, 2023
Propylene Oxide Prices Increase in Europe Amid Rising Demand From Glycol Industries
- 05-Jun-2023 2:16 PM
- Journalist: Rene Swann
As per the recent analysis, the Propylene Oxide market showcased positive sentiments during May 2023 after declining in the European region for the past couple of months. At the end of April 2023, the Propylene Oxide market shifted upward due to the increased inquiries and offtakes from downstream Propylene Glycol industries.
Meanwhile, Propylene Oxide’s inquiries were stable to low from the Polyol manufacturers for the past few weeks amid low consumption and availability of previous stocks. The regional Polyol manufacturers started destocking their product inventories in the Asian market like India as the Asian key market of China was closed from 1st May to 3rd May 2023 due to the Labour Day holidays. The Polyol market continued to remain dull and weak till the end of the month, and prices were again negatively revised by suppliers.
The supplies were tightened by Glycol producers as the available stocks of downstream product Propylene Glycol were limited in the market due to declined production rates of Propylene Oxide. The reason is that around 60% of Propylene Oxide goes to the Polyol industries to make Polyurethane. For the past few months, the downstream orders were depressing from the Polyol industries. So Propylene Oxide producers cut down their production rates. It affected the feedstock availability to the Propylene Glycol industries. Consequently, the production rates of Propylene Glycol remained moderately low in the past few weeks, and the inventory levels remained below the demand from end-users.
According to the ChemAnalyst data sources, the Propylene Oxide prices increased by 1% in May 2023, and the Propylene Glycol prices rose by USD 20/MT.
On the contrary, the upstream cost pressure eased as the Propylene Oxide key feedstock Propylene’s prices contracted by almost 12% during the month amid decreases in upstream Naphtha costs due to increased inventory levels.
Furthermore, Europe’s manufacturing Purchaser’s Manufacturing Index rose slightly during May 2023, indicating some improvement in manufacturing activities. However, it was below 50 points.
As per ChemAnalyst’s estimation, “The Propylene oxide prices will increase in the upcoming weeks due to positive market sentiments. The increasing demand from downstream Propylene Glycol producers will further boost the manufacturing and trading activities of Propylene Oxide. Meanwhile, recent stabilizations in costs of the feedstock Propylene and improvement in upstream Crude Oil price will increase the upstream cost pressure and production costs of Propylene Oxide. Conversely, inquiries are likely to remain weak from the Polyol industries amid slow consumption from downstream Polyurethane industries.”
June 5, 2023
Global and U.S. chemical production trended higher in April, ACC says
MOSCOW (MRC) — Marking another month of incremental gains, global and U.S. chemical production rose in April. According to the American Chemistry Council (ACC; Washington, D.C.), the Global Chemical Production Regional Index (Global CPRI) rose by 0.4% in April following a revised 1.5 % increase in March, said Chemengonline.
In the U.S., the U.S. Chemical Production Regional Index (U.S. CPRI) rose 0.5% in April. Both indices are measured on a three-month moving average (3MMA) basis to reduce month-to-month volatility.
“Chemical output increased in April for all regions except South America,” said Martha Moore, ACC’s chief economist. “On a year-over-year basis, while global production remained lower compared to a year ago, output was higher in Europe, Asia Pacific, and Africa & Middle East.”
In the U.S., April’s gain reflects improvement across several chemistries, especially those recovering from production outages during Q1 due to bad weather and maintenance to refineries, says ACC.
We remind, The U.S. Chemical Production Regional Index (U.S. CPRI) rose by 0.7% in February, following declines of 2.4% in December and 0.6% in January, according to the American Chemistry Council (ACC; Washington, D.C.).
mrchub.com
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May 31, 2023
Apollo’s Top Economist Says Supply Chain Roller Coaster Over
by Tyler Durden
Wednesday, May 31, 2023 – 03:45 PM
According to a new report from Apollo’s chief economist Torsten Sløk, the global supply chain crisis appears to be over, as there are indications of normalization in shipping rates, delivery capacity, and retailer inventory.
Sløk presents a chart pack that shows the supply chain roller coaster ride of the last three years is over. He shared several charts showing cheaper shipping costs and fewer bottlenecks, which might support disinflation trends.
Price of transporting a container from China at pre-pandemic levels
Container freight rates falling: Inflation pressures are easing
Container ships at America’s largest ports return to pre-pandemic levels
Amount of time a container waits to get picked up at a marine terminal after being unloaded from a vessel
Supply chains have normalized
Sløk then argues supply chain normalization has put downward pressure on inflation.
Inventory to sales ratio normalizing
Inflation pressures are gradually easing
More evidence of supply chain normalization puts downward pressure on inflation
Supply chain bottlenecks correlated with corporate bond yields
Sløk’s chart pack aligns with Goldman Sachs’ latest data on tracking supply chains showing barely any congestion.
Considering the importance of supply chains, its return to normalcy is more positive news that could help subdue inflation.
In terms of what’s next, A.P. Moller-Maersk A/S, the world’s biggest shipping company, issued a warning several weeks ago about a potential global slowdown.
https://www.zerohedge.com/markets/apollos-top-economist-says-supply-chain-roller-coaster-over
May 30, 2023
$0.385/lb . . .
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