The Tertiary Butyl Alcohol (TBA) market in Germany exhibited stability in December 2024. Initial price instability in the previous month were tempered by high inventory levels and easing energy costs. Despite macroeconomic challenges and subdued demand from key sectors like automotive and construction, the market remained relatively stable.

While demand for TBA from key consumption sectors like automotive and construction remained mixed, factors like easing energy costs and high inventory levels prevented a significant price surge. The German TBA market faced a challenging environment in 2024. Sluggish demand, stemming from macroeconomic headwinds and reduced activity in downstream sectors such as solvents, cosmetics, and pharmaceuticals, impacted market dynamics. High inventory levels of TBA further moderated price gains, as oversupply offset the upward pressure from feedstock costs.

Automotive and construction sectors, key consumers of TBA, continued to exhibit mixed trends demand. The pharmaceutical and industrial cleaning segments provided stable consumption levels, offsetting some of the weaker demand in other downstream sectors. Germany’s fuel sector observed a slight uptick in gasoline blending demand, driven by seasonal adjustments.

Germany's manufacturing sector showed signs of stabilization, with production, new orders, and inventories contracting at a slower rate than in previous months. This moderation suggests a potential economic bottom may have been reached, which could lend stability to the TBA market heading into 2025.

Energy prices in Europe, although still elevated, began to ease towards late November, stabilizing TBA production costs. Domestic TBA production remained moderate, with no major disruptions reported despite high energy costs in November. Imports continued to supplement the market, ensuring manageable inventory levels.

TBA’s upstream crude oil prices plunged during the first week of December, with Brent settling at USD 72.54/barrel and WTI at USD 68.44/barrel. Factors contributing to this decline include concerns about a potential supply surplus in 2025, rising oil and gas rig counts in the US, and weak demand for oil from China and key export markets for Saudi Arabia.

As per the sources representing German chemical companies, anticipates that orders and sales in the German chemicals sector will stagnate in 2025 due to elevated producer prices and diminished order backlogs. The sector faces challenges such as elevated production expenses, low demand, and rising bureaucracy, encouraging members to cut budgets in Germany and boost investments overseas.

The production of domestic passenger cars in Germany increased in November, providing some optimism to TBA market. However, the Germany Construction activities continued to decrease to its lowest level since April, prolonging the current downturn.

ChemAnalyst pricing team anticipates an upward trend in TBA prices in the upcoming weeks due to firm consumer demand and improved market dynamics.