After showcasing a significant rise in Q1 of 2023, prices for Isobutylene have been falling during April 2023, and it is projected that this trend will continue until the end of May 2023. Imports from major exporting countries like South Korea and China have improved on the backdrop of easing supply chain constraints, cheaper shipping containers, and fewer berth delays. Although, the weakening demand from the downstream value chain, such as Butyl Rubber and Polyisobutylene with sufficient material availability, has weighed down the prices of Isobutylene in the region. Furthermore, the macroeconomic uncertainties like the speculation of recession, rising interest rates by the European central bank (ECB) and US Federal Reserve Bank to tame inflation, and the failure of the two significant banks have further impacted the market growth of Isobutylene. Market players reported that the market performance of the end-user automobile and construction sector has recently been below par, which directly impacts consumer demand for Isobutylene.

Isobutylene prices have decreased in the European market due to dull buying sentiments and sufficient inventory in the region. Although upstream Crude Oil and feedstock Tertiary Butyl Alcohol prices have been observed on the higher end, it had a limited impact on the prices of Isobutylene in the region. In addition, the ample material available via the steady inflows of imports from the Asian market amid a decline in freight rates has led to the price decrease in the region. On the other side, demand for Isobutylene from the downstream Butyl Rubber and Polyisobutylene has remained on the lighter side in the European market amid economic uncertainties. As per the sources, market transactions were relatively flat, and the downstream procurement was based on a need-on-need basis. Thus, prices of Isobutylene FD Hamburg were settled at USD 1182/MT with a month-on-month decrement of USD 19/MT during April 2023.

Similarly, a decline in the prices of Isobutylene was witnessed in the US market on account of slow market dynamics and fewer demand outlooks placed by the buyers. Although, upstream Crude Oil prices were increased throughout the month amid a decline in crude inventories, indicating an improvement in the country’s oil demand. In addition, Energy Information Administration (EIA) reported on 21st April that Crude Oil stockpiles have dropped from 5.1-million-barrel to 460.9 million barrels. However, price increases were limited due to ongoing recessionary concerns caused by weak global economic conditions. Furthermore, demand from the automotive as well as from the construction (end-user) industry have remained gloomy with limited new orders; thus, the offtake of Isobutylene has dropped in the domestic market. On the other hand, smooth trading flow and sufficient inventories have further weakened the prices of Isobutylene. Hence, as a result, prices of Isobutylene FD Texas were assessed at USD 1109/MT during the same time frame.

According to ChemAnalyst anticipation, Isobutylene prices will further drop in the coming weeks on account of weak demand from the downstream Butyl Rubber and Polyisobutylene. Feedstock Tertiary Butyl Alcohol prices are likely to decline, which may further impact the production cost of Isobutylene in the upcoming weeks.