In November 2024, Polyol prices in the European region increased, with market participants raising their quotations.

Polyol production rates were average in Europe, supported by moderate feedstock availability in the region. The rise in Polyol key feedstock Propylene Oxide costs, driven by strong demand from Propylene Glycol manufacturers supported by steady orders from international buyers, exerted upward pressure on the Polyol production costs. At the same time, the weak availability of upstream propylene, caused by reduced imports and ongoing logistics constraints, has contributed to the increase in prices. Additionally, the Euro area manufacturing downturn persisted into Q4, with the Eurozone Manufacturing Purchasing Manager’s Output Index for November 2024 dropping below October’s level, hitting a two-month low. Business activity contracted again, marking the second decline in three months. Confidence in future output sank to its lowest point in over a year, while new orders fell for the sixth straight month at a significant pace. Consequently, Polyol export rates were low for the importers during the month.

Meanwhile, the orders for Polyol remained moderate in the Polyurethane segment, driven by mixed demand for Polyurethane materials in the construction and automotive sectors. The consumption of PU materials remained low in the construction sector, while demand in the automotive sector remained strong. In October 2024, the Eurozone construction industry continued to face pressure, with contraction driven by economic and political uncertainties. Demand declined across commercial, civil engineering, and residential construction, with major economies like Germany and France struggling with new project launches and weak investment sentiment. Although cost pressures eased due to lower input prices and reduced subcontractor rates, this reflected declining demand rather than sector recovery. On the other hand, the automotive sector saw growth, with Germany selling 231,192 units in October 2024, an 11.1% increase from September and a 6.0% rise compared to the same period last year, according to the German Federal Motor Vehicle Office (KBA).

According to the ChemAnalyst data sources, at the end of November 2024, Polyether Polyol MW 3000, μ 400-650 FOB Hamburg prices witnessed USD 1530/MT, after a marginal increase of 0.7% in the previous month's quotations.

As per the ChemAnalyst estimation, Polyol prices in the European region are expected to rise further towards the end of the final quarter of 2024, driven by an anticipated increase in demand from the Polyurethane segment. At the same time, the increase in operational costs resulting from a spike in energy prices during the winter will result in a rise in the Polyol production costs. Additionally, weak production, compounded by limited availability of feedstocks, may exacerbate supply challenges. As a result, Polyol supply rates could remain constrained during the peak winter months.