Why is neopentyl glycol (NPG) pricing decoupling from its feedstock isobutyraldehyde?

Why is neopentyl glycol (NPG) pricing decoupling from its feedstock isobutyraldehyde?
The NPG market has repeatedly failed to fully pass through feedstock cost swings. In May, isobutyraldehyde rebounded by 1,200 yuan/ton after the Labor Day holiday, yet NPG prices only managed a 200-300 yuan gain. Cost pressure pushed hydrogenation-route producers to breakeven, while disproportionation plants struggled even more. Supply-side support emerged from scheduled maintenance at Shandong Lihuayi and some disproportionation units, which helped clear inventories. However, producers remained cautious about aggressive hikes, partly due to weak downstream buying sentiment and ample capacity. The structural issue is that NPG capacity expansion has outpaced demand growth, leaving little pricing power even when upstream costs surge. Until polyester resin demand strengthens meaningfully, NPG will likely continue tracking isobutyraldehyde with a lag and a compressed margin.