Versatility has been observed in the global Iso-butanol market during August, with some regions admitting stability while other Asian countries acknowledged a price hike amid a recovery in economic activities and supply curtailment.

Despite the contraction in economic activities, the market for Iso-butanol in Germany admitted stability to settle at USD 1590/MT FD Hamburg during August 2023. After signing the marginal drop in the previous month, the German market of Iso-butanol remained unchanged, on the verge of demand and supply staying roughly the same. According to Eurostat, the German PPI fell to 134 in July, reflecting the contraction in factory activity, which is expected to continue in August. The subdued demand from the downstream paints and coating industry persisted, followed by the previous month, as the enterprises received fewer orders for Iso-butanol in the regional market during this timeframe. Moreover, several business confidences have been further hurt by the declining order book and broader economic concerns, which have led to a decrease in factory output. In the meantime, few production units were operating at lower run rates due to the domestic market's availability of expensive feedstock propylene. However, the production cost of Iso-butanol remained unaffected due to lesser-than-expected demand for the product, and overall supply chain activities in the region were seamless, with no major supply-related concerns detected. As a result, demand-supply fundamentals have remained stable, with the gap between supply and demand remaining narrow enough to support the current price trend of Iso-butanol in Germany.

On the contrary, the Asian Iso-butanol market underwent a steady inclination during August on the back of improved demand from the downstream plasticizer industry. A monthly rise of +6.5% has been observed by prices of Iso-butanol for Japan during August to settle at USD 1544/MT, Osaka on CFR basis. As per the data, several feedstock propylene plants in Japan went under maintenance turnaround, including ENEOS Corp in Sakai, which has a 100,000 mt/year capacity till August 2023. This has reduced the amount of propylene available on-site, which eventually caused the production cost to showcase a significant rise. Therefore, to meet the current demand dynamics, expensive cargoes of Iso-butanol have been imported into the ports of Japan during this timeframe, which was further supported by currency fluctuations as the Japanese Yen depreciated by -2.08% against the USD during August. Additionally, unpredicted expansion in private sector activity in Japan was observed, which has increased the likelihood of a market rise.

As per ChemAnalyst, the market of Iso-butanol is expected to showcase a bullish trend during September on the verge of supply disruption of feedstock propylene, which might surge the production cost of Iso-butanol globally.