US Polyol Prices Plummets Amid Pessimistic Downstream Demand
- 20-Dec-2023 4:04 PM
- Journalist: Sasha Fernandes
Texas, USA- In the US market, the Polyol prices witness a decrease of 1.4% in the first half of December 2023 amid depressed demand and procurement activities from the Polyurethane segment.
The Polyol inventory levels were adequately available in the market. At the same time, the cost support declined from the feedstock Propylene Oxide during the first half of the month amid improved feedstock availability of Propane in the past weeks amidst a reduction in WTI Crude Oil prices after the resumed refinery operations and increased refining capacity in the region.
Meanwhile, INVISTA in Houston Texas, with an upstream Propylene production capacity of 54833 TPM, went for Force Majeure during November 2023 and affected the production rates of the Polyol’s feedstock Propylene Oxide. Consequently, the feedstock availability was slightly low, and Polyol production rates remained moderate in the North American region.
According to the market sources, the USA manufacturing sector Purchasing Manager’s Index decreased to slightly below 50 points during November 2023 amidst a decline in demand from the buyers, indicating a contraction in the manufacturing sector activities. Consequently, the demand for Polyether Polyol remained low from the Polyurethane industries more significantly towards the end of the month after Black Friday sales. Meanwhile, Polyol inquiries were already for PU from the Automotive sector low due to adequate availability of previous stocks and depressed consumption rates amid the United Auto Workers (UAW) strike during the last month. Similarly, the inquiries for Polyurethane foam were depressing from the manufacturing sector amid reductions in procurement activities from the buyers.
The trading activities reduced consistently in the past few weeks amid a simultaneous decrease in Polyol offtakes from the domestic market. As per the reports, the decrease in the Panama Canal water levels during the past month was attributed by the dry weather conditions because of the El Nina effect. It resulted in a decline in Cargo rates in the US. The cargo rates will continue to reduce towards the end of the year and in Q1 of 2023 till the improvement in water levels of the Canal.
As per the ChemAnalyst data sources, the Polyether Polyol MW 3000, μ 400-650 FOB Texas discussions in the US hovered at USD 2120/MT on 15th December 2023.
As per the assessment, Polyol prices will continue to decline in the US market until the end of the year amid the availability of Asian supplies in the international market. The manufacturing activities will remain low towards the end of the year and beginning of quarter 1 of 2024 because of the New Year holidays. Simultaneously, the shipping rates will decline further during peak winter. So, the Polyol prices will likely increase in the first quarter of 2024.
