The global market for Diethylene Glycol (DEG) is currently showcasing divergent trends, particularly evident in the stark contrast between the performance of regions like Asia-Pacific and the struggles faced by markets in Europe and the United States. In March 2025, the pricing dynamics of DEG were primarily driven by intricate factors including demand fluctuations, material availability, production costs, and the volatile nature of crude oil prices, which significantly shape market sentiment.
In the U.S. market, the price of DEG began to falter, with a notable decline of 2.08% observed in the early weeks of March. This decrease can be attributed largely to elevated inventory levels paired with weak production costs. Additionally, feedstock prices for Ethylene Oxide saw a significant drop of 10.7%, correlating closely with a slump in upstream Ethylene prices. The downstream paints and coatings sector reported subdued demand, further complicating the landscape for DEG pricing.
Evidence of this weakened demand became apparent through the examination of U.S. automotive sales, which showcased a downturn in February 2025. Concerns surrounding potential tariffs impacting imports from Mexico and Canada contributed to these declines. According to reports, the situation mirrored trends in the European market, where DEG prices also encountered downward pressure.
In Germany, prices for DEG decreased by 1.62% during the first half of March, driven by a combination of large inventory accumulations and low import prices from overseas markets. This trend was further influenced by a drop in Ethylene Oxide prices of 7.2%, largely due to the compounding effects of weak upstream Ethylene costs and decreasing crude oil prices.
Meanwhile, data from the German Federal Land Transport Authority (KBA) indicated a significant decline of 6.4% in new passenger car registrations in February 2025, with total figures resting at 203,434 units. This decline adds to the evidence that the automotive sector's slowdown is forecasting diminishing demand for DEG across the industrial coatings and resins sectors.
Contrastingly, the Asia-Pacific region, particularly in China, demonstrated a bullish trend in DEG pricing. Reports highlighted an increase in prices, which corresponded with an overall tightening of existing inventory levels. The resurgence within the domestic automotive sector provided a revitalizing boost to DEG demand.
As per the China Association of Automobile Manufacturers (CAAM), vehicle sales in China surged a remarkable 34.4% year-on-year in February 2025, hitting 2.129 million units. This rebound came after a momentary decline of 0.6% in the preceding month and has been instrumental in enhancing the consumption of resins, paints, and coatings, thus driving a more favorable demand for DEG.
In the Middle East and Africa (MEA) region, DEG prices showed resilience with a 1.4% increase in Saudi Arabia, largely attributed to modifications in supply operation patterns during the Ramadan period. Notably, Ethylene Oxide prices in this region remained steady amidst stable upstream Ethylene costs.
Moving to the coatings and construction industries, IMCD’s latest Customer Trends Survey sheds light on the megatrends projected to shape the market through 2025 and beyond. Carola Duncan, Global Marketing Director at IMCD, emphasized the survey's aim in understanding industry trends and consumer preferences, revealing significant insights gained from nearly 1,500 respondent participants across 30 countries.
One of the standout discoveries from the survey was a surge in the ‘Healthy Future’ trend, which escalated from 18% to 30%, marking it as the second most critical trend alongside ‘Green & Circular’, which continues to hold the top position across various regions, except the Americas. Here, the ‘Efficiency’ trend is viewed as the most impactful. Overall, 68% of survey participants deemed these two sustainability-driven trends highly significant.
The increased focus on health-conscious products is shaping industry directions, with 70% of respondents citing sustainable products as key differentiators in an increasingly competitive marketplace. However, a pertinent challenge remains—the willingness to pay for sustainable options hinges significantly on cost absorption and return on investment, particularly affecting purchasing decisions in sectors like construction and industrial coatings.
Duncan also pinpointed that as consumer awareness about sustainability grows, expectations from decorative coatings are shifting. This trend is evidenced by over 80% of customers in Europe prioritizing the reduction of CO2 emissions and other material costs, signalling a clear preference for formulations leveraging bio-based binders and recycled fillers.
Conversely, challenges in maintaining performance quality with alternative materials persist, particularly for decorative paints where specific properties like opacity and weather durability are critical. The same issue reflects within the industrial coatings sector, where manufacturers face pressures to develop sustainable yet efficient formulations without compromising on the regulatory compliance and performance standards traditionally set by solvent-borne coatings.
In conclusion, the trends emerging from both the global DEG market and the coatings industry reveal a complex landscape. While regions like Asia-Pacific display vitality, the U.S. and European markets contend with a plethora of challenges stemming from regulatory impacts, consumer demand fluctuations, and evolving market pressures. As industries evolve in response to sustainability demands, they face a transformative period where embracing innovation and addressing challenges will define their successes in the competitive marketplace.
