Chinese DPGME Prices Remain Steady Throughout January 2024

In January 2024, the Chinese market for Dipropylene Glycol Monomethyl Ether (DPGME) exhibited a continuous and stable trend, influenced by intricate dynamics in diverse industrial sectors. The propylene feedstock experienced fluctuations throughout the month, initially declining in the first three weeks but significantly improving in the last week of January. This price upswing played a crucial role in stabilizing the DPGME price.

The real estate sector, experiencing a 1.3% drop in added value in 2023 compared to the prior year, not only impacted local government revenues but also had a cascading effect on various associated industries, ranging from furniture to coating. As per DOW's Q4 2023 report, the downstream Polyurethanes & Construction Chemicals segment observed a year-on-year decline in net sales, influenced by lower prices across all regions, partially mitigated by widespread business and geographic volume gains. Sequentially, global net sales decreased due to reduced local prices. Despite this, the demand for DPGME experienced a rise in the automotive sector's paint and coating industries, where China has cemented its status as a significant vehicle exporter. The approaching Lunar New Year impacted China's DPGME market, leading to the early closures of downstream textile factories, emphasizing the product's connection to market dynamics and festive periods.

The demand of DPGME from Europe remains subdued, with the eurozone construction sector staying in contraction territory in January due to weak DPGME demand and declines across key markets. Germany's construction sector felt the impact of the country's broader economic slowdown impacted the DPGME price. Throughout the eurozone, all crucial construction sectors experienced declines, particularly in house-building activity. However, the automotive sector exhibited resilience, witnessing increased demand for paint and coating products in China that stabilize the DPGME price. Chinese-brand passenger vehicle sales experienced a remarkable surge, increasing by 24.1% year-on-year and reaching 14.6 million units. This surge played a crucial role in the overall growth of auto sales, surpassing 30.09 million units. New energy vehicle sales also experienced a remarkable surge of 37.9% year-on-year, exceeding 9.49 million units. Amid geopolitical uncertainties arising from the Ukraine invasion, China strategically seized the opportunity to fill the void left by global manufacturers withdrawing from Russia. This strategic move involved maintaining business relations and fostering growth in car sales. The price of DPGME in January was USD 1520/MT FOB Qingdao.

While the Lunar New Year holiday is temporary, factories are anticipated to resume operations after the festivities. According to ChemAnalyst, DPGME prices in the Chinese market are projected to move gradually and steadily in Q1 of 2024, supported by improved productivity rates and a moderate demand outlook.