The U.S. experienced a notable increase in prices of Butanediol (BDO) driven by several factors, including refining capacity reductions, geopolitical tensions, and demand shifts. Meanwhile, Germany maintained stable BDO prices, supported by balanced supply and demand dynamics and steady raw material costs in the month of November 2024.

The tightening supply in the U.S., driven by planned refinery closures like LyondellBasell’s Houston and Phillips 66’s Los Angeles facilities, coupled with strong demand for gasoline and jet fuel, contributed to rising BDO prices. Geopolitical tensions, particularly the Russia-Ukraine conflict, further pushed crude oil prices higher, escalating production costs across various sectors, including BDO. Refining disruptions and increased raw material prices, such as formaldehyde, also played a key role in driving up costs in petrochemicals and textiles, which in turn impacted the BDO market.

In the U.S. textile industry, shifting sourcing strategies led to a decline in imports from traditional Asian suppliers, with businesses increasingly turning to Mexico and Central America. While this shift helped stabilize some production costs, it also influenced BDO demand in the sector. Meanwhile, the manufacturing sector showed signs of weakness, with a drop-in production activity and declining orders, as reported by the Federal Reserve Bank of Dallas, which could further affect BDO consumption in manufacturing processes.

In contrast, Germany experienced price stability for BDO in November 2024. This stability was due to a balance between supply and demand, with industrial production maintaining a steady pace. The German economy saw moderate growth in its manufacturing sector, supported by consistent demand for downstream products such as PBT, THF, and PU resins, which in turn stabilized the BDO market in the country.

While the German textile industry, much like its U.S. counterpart, faced shifts in global supply chains, it benefited from stable demand and a resilient local market. The European Union's textile sector showed signs of recovery, aided by a steady rebound in exports and ongoing investments in sustainability. The impact of nearshoring in the U.S. was also felt in Europe, as some European textile companies benefited from shifting sourcing strategies closer to the region, which helped sustain BDO demand for local production.

Germany’s manufacturing sector also showed resilience, with moderate growth in industrial output despite ongoing challenges like inflationary pressures and global geopolitical tensions. The European Commission's industry confidence indicator improved slightly, and production expectations were positive, although concerns over energy prices and supply chain disruptions persisted. BDO demand in industrial sectors remained steady due to these factors.

Looking ahead, the U.S. market faces ongoing challenges, with refining capacity reductions and geopolitical tensions continuing to influence price volatility. The manufacturing and textile sectors may experience slower growth, with shifting supply chains and raw material costs, including BDO, playing significant roles. In contrast, Germany's outlook appears more stable, with moderate growth expected in industrial production and the textile sector. However, inflationary pressures and energy costs could still pose risks to overall economic stability, potentially impacting BDO prices.