Hamburg (Germany): The N-propyl acetate market in Germany has declined due to lower acetic acid prices, while prices of its N-propyl acetate upstream methanol have remained stable, according to Methanex's May contract prices. Adequate stocks have been maintained to meet downstream demand. The N-propyl acetate downstream construction sector's sustained demand, fuelled by increased foreign direct investment, has bolstered positive market sentiment. Additionally, the European Central Bank's decision to maintain a 4.5% interest rate since the beginning of 2024 has contributed to market N-propyl acetate downward trends. The Manufacturing Purchasing Managers' Index (PMI) for the euro area maintained stability throughout April 2024.

However, the contraction in output eased for the second consecutive month to its slowest pace in a year. Additionally, import prices from China increased this week, leading to higher overall import costs. Heightened tensions between Iran and Israel are expected to raise freight charges and insurance premiums for global shipping routes, particularly affecting vessels bound for Western Europe and the US.

The ongoing Red Sea crisis continues to disrupt global N-propyl acetate supply chains, significantly impacting Asian markets with no resolution in sight. Despite these challenges, domestic production remains strong, effectively meeting the high demand from N-propyl acetate downstream industries, particularly the construction sector. Stable N-propyl acetate feedstock acetic acid prices have been maintained by consistent production costs, but there are concerns about potential price hikes due to heightened risks associated with Houthi activity in the region. Ocean freight rates from Asia to Europe have surpassed contract rates as vessel capacity tightens amid the crisis. Thorsten Meincke, COO of DB Schenker, highlighted a reduction in weekly vessel capacity due to extended voyage times around the Cape of Good Hope, resulting in fewer scheduled voyages between Asia and Europe.

Subdued demand persists in the downstream construction industry as the German N-propyl acetate downstream construction sector contends with its first nationwide strike since 2002. Robert Feiger, head of the IG BAU union, announced plans for a significant strike after employers declined the arbitrated deal, despite the union's acceptance of it in late April. Feiger urged construction companies to communicate potential delays in housing, motorway, and industrial N-propyl acetate construction projects to developers but did not specify when the strikes would occur. Germany's N-propyl acetate construction sector already faces challenges due to a rapid increase in interest rates and costs, marking the conclusion of a years-long surge propelled by low rates and robust demand. These factors compound the complexity of challenges confronting the industry.