Propylene Glycol: Price and Supply Continue to Weather the Storm
Propylene Glycol (PG) is a colorless, odorless, synthetic liquid that has myriad uses in food, pharmaceutical and chemical industries. Although production and distribution had been steady through early 2020, PG has fallen victim to recent logistical challenges that have limited supply and subsequently driven up prices.
Before exploring the reasons for the price increase, below are the four primary manufacturers of Propylene Glycol in the U.S., all of which have manufacturing plants located in Texas:
- Dow Chemical
Beyond familiar supply chain issues associated with COVID-19, inclimate and unpredictable weather has had the most dramatic impact on the available supply and current price of PG. For example, the hurricane season of 2020 forced plant shutdowns throughout Texas and Louisiana, reducing production of PG up to 50%. A few months later, the historic winter storms that ripped through Texas almost completely froze production, as nearly 90% of PG manufacturing shut down. Even domestic shipping was affected, as hard freezes left rivers frozen and roads impassable. Further complicating things, the feedstock used in the manufacturing of Propylene Glycol was in limited production, and a relative surge in demand for PG in both Q3 and Q4 left demand greatly outpacing supply. As a result, transportation cost estimates for 2021 are much higher than costs in 2020, and the price for PG continues to climb.
To date, the price forecast for Propylene Glycol remains largely unknown, as supply is limited and certain manufacturers and distributors are unable to take on new clients. Fortunately, Keller-Heartt is still able to support our customers’ current needs for PG heat transfer fluids. Despite the recent production and logistical challenges, Keller-Heartt has stable, reliable resources for both food grade and industrial heat transfer applications, and we are here to answer all of your questions about PG, its applications and its future.
Polypropylene prices are at record levels and more than double the 2019-2020 average according to ICIS.