European Tertiary Butyl Alcohol Prices Face Turbulence: Supply Chain Disruptions and Stagnant Demand Impact Prices

Hamburg, Germany: The German Tertiary Butyl Alcohol market demonstrated a slight uptick in January 2024 due to increased manufacturing costs. Imports of upstream raw materials of Tertiary Butyl Alcohol from the US and Asian markets faced delays in German ports, affected by disruptions in the Red Sea and prolonged drought in the Panama Canal. This is adding further complexity to the pricing dynamics of various commodities, including the upstream naphtha and raffinate markets. As of January 26, 2024, the assessed prices of Tertiary Butyl Alcohol anhydrous FOB Marl were USD 985/MT.

Europe's economy faced stagnation in the last quarter of the previous year, widening the gap between a thriving U.S. economy and a European continent that is falling behind. The latest economic data revealed that increased borrowing costs, coupled with the earlier effects of elevated energy prices following Russia's invasion of Ukraine, have contributed to the challenges faced by the European economy.

Inquiries for Tertiary Butyl Alcohol from the downstream solvents manufacturing industry have remained low. Additionally, domestic manufacturers were operating at lower levels amid timid demand for petrochemicals such as Tertiary Butyl Alcohol, as suggested by the manufacturing PMI data. The cost support from the upstream raw material of Tertiary Butyl Alcohol has been fluctuating in the region, whereas domestic inventories were running at lower levels as procurement was mainly on a need basis.

In 2023, there was a lack of demand for petrochemicals such as Tertiary Butyl Alcohol, leading to a drop in prices. This occurred when the costs of producing chemicals were very high, especially for energy and raw materials of petrochemicals, including Tertiary Butyl Alcohol. As a result, European chemical companies had a tough time financially, and they don't expect things to improve significantly until at least the middle of 2024. In December 2023, the inflation rate, which measures how much prices have gone up compared to the previous year, was +3.7%. This means that prices increased at the end of the year, going up again after having gone down in the months before.

According to the ChemAnalyst database, Tertiary Butyl Alcohol prices are anticipated to stabilize in the upcoming weeks in the hopes of easing the ongoing distress in the Middle East, including the ongoing issues in the Red Sea. Recent data indicates a significant over 40 percent reduction in traffic through the Red Sea, creating disruptions in global supply chains, including petrochemicals such as Tertiary Butyl Alcohol. In response, major shipping operators globally have redirected their vessels around the Cape of Good Hope. This rerouting has resulted in delayed delivery times and an additional 6,000 km added to their routes.