Recent Market Intelligence Report on Neopentyl Glycol (NPG)

I. Price Trends
- National Average Price in Mainstream Markets: From May 14 to May 22, 2026, the national average price of NPG in mainstream markets declined continuously from RMB 8,800/ton to RMB 8,000/ton, representing a cumulative decline of RMB 800/ton, or a 9.09% drop. The largest single-day decline occurred on May 20, amounting to RMB 300/ton (a 3.49% decrease).
- Regional Market Quotations:
- East China Region: As of May 25, the negotiated price for hydrogenation-process NPG was RMB 8,900–9,300/ton (inclusive of acceptance and delivery); similarly, the negotiated price for disproportionation-process NPG stood at RMB 8,900–9,300/ton (inclusive of acceptance and delivery).
- South China Region: As of May 25, the negotiated price for domestically produced hydrogenation-process NPG was RMB 8,900–9,300/ton (inclusive of acceptance and delivery).
- Shandong Region: As of May 26, Shandong Hongyang Chemical Co., Ltd. quoted RMB 9,000/ton (purity 99.5%), while Luxi Chemical Group Co., Ltd. quoted RMB 7,250/ton (Luxi Chemical brand).

II. Supply-Demand Dynamics
- Supply Side:
- Factory Quotations Loosening: Influenced by the recent easing of high-priced isobutyraldehyde (the key raw material) and weak downstream demand, NPG producers have persistently lowered their quotations to facilitate sales, reflecting markedly increased urgency to offload inventory. For instance, Wanhua Chemical and Binzhou Xinkewode have adjusted prices downward multiple times recently.
- Pressure from Capacity Expansion: In 2026, China’s NPG production capacity has entered the one-million-ton-per-year tier. Major new projects—including Wanhua Chemical’s Phase IV and Luxi Chemical’s Phase II—have commenced operations sequentially, adding nearly 200,000 tons of annual capacity. Consequently, the industry-wide oversupply situation remains structurally entrenched.
- Demand Side:
- Downstream Resistance: Downstream sectors—including powder coatings and high-solids coatings—exhibit strong resistance to elevated NPG pricing, resulting in cautious purchasing behavior and sluggish spot transaction volumes.
- Slowing Demand Growth: Downstream industries are undergoing capacity rationalization and consolidation, entering a phase of stabilized demand growth. This limits their ability to absorb newly added production capacity.

III. Cost Support
- Isobutyraldehyde Raw Material Prices: Although isobutyraldehyde prices—previously at historically high levels—have recently softened, cost pressure remains significant. Since mid-May, while isobutyraldehyde prices have retreated somewhat, they remain relatively elevated, continuing to exert substantial cost support for NPG.
- Cost Pass-Through Effect: Fluctuations in raw material prices directly transmit to the NPG market; thus, raw material cost pressure remains one of the pivotal determinants influencing NPG price trends.

IV. Market Competition
- Intensifying Price War: Homogenized competition across the industry has intensified significantly, causing widespread declines in enterprise profitability. The market has fallen into a passive “price-cutting-for-volume” cycle. For example, some Shandong-based producers have quoted as low as RMB 7,200–7,250/ton—substantially below the national mainstream market average.
- Brand- and Region-Based Price Differentials: Significant price gaps exist between different brands and across regions. For instance, Yantai Wanhua-branded NPG commands relatively higher quotations in East China, whereas domestic brands such as Luxi Chemical are priced comparatively lower.

Analysis & Outlook
1. Short-Term Price Pressure: Constrained by loose supply-demand fundamentals, easing raw material costs, and persistent downstream resistance, NPG prices will likely remain under downward pressure in the near term. Over the coming week, mainstream prices are expected to oscillate within the RMB 8,000–8,500/ton range.
2. Medium-Term Range-Bound Trading: Looking ahead, the NPG market will be shaped by the dual dynamics of capacity expansion and raw material supply constraints. Amidst structural overcapacity, fluctuations in raw material availability—and especially in isobutyraldehyde supply—will directly govern the magnitude of price volatility. A sustained one-way rally or collapse is unlikely; instead, range-bound trading is anticipated to prevail.
3. Rising Significance of Cost Support: Volatility in isobutyraldehyde prices will increasingly serve as a critical determinant of NPG market direction. Should isobutyraldehyde prices continue declining, NPG’s cost floor may weaken further, potentially triggering additional price erosion. Conversely, any rebound in isobutyraldehyde prices could provide tangible upward support to NPG pricing.

Forecast
1. Price Trend Forecast: NPG prices in June 2026 are projected to remain range-bound at RMB 8,000–8,500/ton nationally, with localized markets possibly seeing even lower quotations. While the traditional peak demand season for downstream industries may lend modest support to pricing, a significant upward breakout remains improbable.
2. Supply-Demand Forecast: With new capacities progressively ramping up, the supply-demand imbalance will intensify further. Sluggish downstream demand growth will fail to absorb incremental output, thereby exacerbating competitive intensity across the sector.
3. Industry Trend Forecast: The NPG industry is poised to enter a de-capacity phase, with overall supply growth decelerating markedly. Following the concentrated commissioning of new capacity by leading hydrogenation-process producers, the pace of entry by new players is expected to slow substantially. Going forward, industry participants will place greater emphasis on technological innovation and cost efficiency to enhance competitiveness.