Polyethylene Glycol Prices Rise in Germany in August 2024 Despite Market Challenges

During August 2024, Polyethylene Glycol prices in Germany increased slightly by 0.4% per MT from July. This nominal rise in prices was due to an average recovery in demand from key sectors such as pharmaceuticals and cosmetics and restocking by manufacturers after a period of decreased activity in previous months.

Despite the price increase, the market remained restrained. Germany's Manufacturing PMI continued to indicate declining conditions, reflecting an overall slowdown in industrial activity. However, constrained supply conditions, driven by increased shipping and transportation costs, played a vital role in preventing a price reduction for Polyethylene Glycol. Manufacturers and suppliers encountered significant logistical challenges, which added to the cost burden even though demand remained mediocre.

The supply of Polyethylene Glycol during August was moderate with no major plant shutdowns impacting the production of Polyethylene Glycol were reported during the month. Suppliers faced reduced purchasing activity from the manufacturing sector, leading to a cautious approach toward price adjustments. Even though overall demand was substandard, rising transportation and logistics costs created an environment of slightly higher prices. Manufacturers also maintained minimal pre-production inventories to manage costs in an uncertain economic condition.

In terms of demand, the pharmaceutical and cosmetics industries were the primary consumers of Polyethylene Glycol in August. These sectors rely on Polyethylene Glycol for various formulations, and their steady recovery contributed to price stabilization. Additionally, companies involved in producing derivatives like Sodium Lauryl Ether Sulphate (SLES) began restocking in anticipation of further price increases later in the year. This restocking activity helped to compensate the reduced demand from other sectors, such as construction and automotive, which continued to lag due to broader economic challenges. Despite the recovery in select industries, overall industrial output in Germany remained subdued, with many manufacturers opting for smaller, cautious purchases due to ongoing economic uncertainty.

Looking forward, Polyethylene Glycol prices are expected to witness more variations. Analysts at ChemAnalyst expect a 1.5% increase in September, with additional growth predicted in October. Restocking activities and stable demand from the pharmaceutical and cosmetics sectors are likely to back these price increases. However, seasonal slowdowns during the end of the year are likely to affect the market for Polyethylene Glycol, with prices expected to decrease by 2.0% in November and further in December as industrial activity drops and manufacturers reduce inventories ahead of the holiday season.

The overall economic prospect for Germany remains cautious, and businesses are expected to continue managing their expenditures carefully. While Polyethylene Glycol demand may see a moderate revival in early 2025, driven by increased production in the pharmaceutical sector, economic uncertainty will likely keep market participants watchful.