From a macro perspective, growth in the eurozone demonstrated some resilience in the second calendar quarter of this year, with a gross domestic product rate of 0.7%, exceeding expectations of 0.2% growth and following a GDP rate of 0.5% in the first quarter, according to Eurostat, the statistical office of the European Union.
However, the consequences of the ongoing conflict in eastern Europe continue to impact the outlook for the eurozone economy and drive potential further inflationary pressure. Disruption to natural gas supplies, coupled with rising gas and electricity prices, has increased overall uncertainty and impacted confidence regarding mid- and long-term demand for all industries.
This uncertain environment is also impacting the oleochemicals market. In early October, we met with many customers and suppliers at the European Petrochemical Association (EPCA) Annual Meeting in Berlin. Many of the attending companies we spoke with shared concerns of recessionary pressures, high energy costs and the growing impact on their businesses. Buyers’ healthy stock levels and the settlement of lauric oils after record-high pricing in the first quarter of 2022 enabled oleochemical prices to adjust from record high prices early this year. Mid-chains have adjusted in line with lauric oils. Heavy cuts have partially adjusted; while demand remains healthy, increased supply from Asia found its way into Europe. Light cuts have shown some welcome rebalancing behind reduced demand and eased supply from Asia to Europe.
Although we saw some improvement in ocean freight delivery time frames, the overall transport of goods within Europe remains a challenge, due to the chronic shortage of drivers across the region — exacerbated by increasing demand for transport as the economy begins to recover from the COVID-19 pandemic.
Independent of market circumstances, P&G Chemicals remains committed to supporting our customers’ needs with quality products, local availability and on-time delivery.