Global NPG Market Faces Divergent Trends Amid Fluctuating Demand and Weather Disruptions

The global Neopentyl Glycol (NPG) market exhibited divergent trends across regions during the first week of September 2024. In Western markets, particularly in North America, NPG prices experienced a noticeable upward trajectory. This price surge was primarily driven by strong purchasing activity, bolstered by the moderately robust performance of the downstream construction sector, which sustained demand for NPG. The region's supply chain remained relatively tight, further contributing to the price escalation. In contrast, the NPG market in Asia demonstrated a more subdued performance, with prices remaining soft to stable. The market was characterized by a balanced supply-demand scenario, where demand growth remained limited, failing to exert upward pressure on prices.

In the North American market, NPG prices surged by USD 50 per metric ton, primarily due to a growing imbalance between demand and supply. On the demand side, purchasing activity for NPG remained robust, supported by the moderately strong performance of the downstream construction sector. According to various market participants, the U.S. construction industry added approximately 34,000 jobs in August 2024, with growth in both the residential and non-residential sectors. This increase in construction activity played a key role in sustaining demand for NPG, as it is a critical component in the production of construction paints and coatings. The trend of heightened demand is expected to persist into September, with projections indicating that earnings in the construction sector could grow by 69% annually over the next few years. In anticipation of this growth, consumers have actively been stocking up on construction materials, further fueling demand for NPG.

Despite the strong purchasing activity, the North American market benefited from sufficient inventories of domestically produced NPG, preventing any significant supply shortages. The ample availability of product helped maintain a relatively balanced market, even as demand continued to exert upward pressure on prices.

In contrast, the Asian NPG market exhibited weaker sentiment, with India and China experiencing the most significant impacts. In India, prices dipped slightly due to muted demand, as heavier-than-expected rainfall disrupted construction activities, reducing the need for NPG.

Similarly, the Chinese market faced weak demand, driven by reduced downstream activity and a slowdown in the construction sector. Seasonal demand waned, and adverse weather conditions, including Typhoon Yagi, created uncertainties, prompting consumers to hesitate in making bulk purchases due to concerns over crop damage. This cautious sentiment was further aggravated by the forecast of Typhoon Bebinca, expected to bring strong winds and heavy rainfall. Additionally, the Mid-Autumn Festival holiday resulted in business closures, further dampening domestic demand, compounding the already sluggish market.

According to ChemAnalyst's analysis, the NPG market is expected to witness an upward trend in the coming months. This projection is primarily driven by a seasonal increase in demand, as well as low inventory levels. As industries ramp up production ahead of peak construction and manufacturing seasons, the combination of tightening supplies and higher consumption is likely to put upward pressure on NPG prices across key markets.