German Iso Butanol Market Stabilizes, Contrasting Bearish Situation of Other Oxo Alcohols

In June 2024, the German Iso Butanol market maintained stability amid contrasting conditions in the oxo-alcohol sector. OQ Chemicals' return to production in early May 2024 intensified pressure on spot prices within the oxo-alcohol market, as indicated in their press release dated May 7, 2024. Conversely, the Iso Butanol market in Germany remained steady during the same period, as prices of Iso Butanol were recorded to only have shown a modest rise when compared with oxo-alcohols which inflated over 10% when pricing was supported by tight material availability.

The relative stability of the European Iso Butanol market can be primarily attributed to modest price increases compared to other oxo-alcohols during OQ Chemicals' force majeure period from late February to early May 2024. While n-Butanol and 2-Ethylhexanol prices surged by approximately 60 percent and 12 percent respectively, Iso Butanol prices rose by only 9%. Limited availability of the key feedstock Propylene further influenced market dynamics, despite lower demand from the Polypropylene industry due to logistical challenges, resulting in overall limited production of Iso Butanol

Regarding production costs of Iso Butanol across Europe, during early June 2024, European propylene markets’ balanced supply and demand fundamentals, with activity gradually recovering following early-month bank holidays. Ongoing security tensions in the Red Sea diverted shipping routes, constraining import supplies and sustaining market stability amid reduced demand. Despite the ongoing limitations on imported materials, increasing cargoes destined for Europe signalled a normalization in longer shipping routes from the Middle East and Asia. Notably, some Propylene shipments from the Middle East expected to arrive in Europe in the ensuing weeks, underscoring the market's resilience amidst present logistical complexities, which continued to lead to uncertainties in the production costs of Iso Butanol, the availability being abundant

In conclusion, while the European Iso Butanol market sustained stability in June 2024, driven by resilient demand from the downstream Iso-Butyl Phthalate industries and moderate price increases relative to other oxo-alcohols, challenges persisted in the broader oxo-alcohol market as OQ Chemicals return to production was recorded to have resulted in the market sentiments transitioning from cautious too anxious as suppliers wait for the prices to fall further, coupled with sluggish demand from the overall downstream paints and coating and plasticizer industry. Overall, the German Iso Butanol market is expected to exhibit resilience as European downstream manufacturers incline towards domestic production given the impractical arbitrage from Asia and Middle East coupled with expected increments in the prices of feedstock Propylene.