German Tertiary Butyl Alcohol Prices Stagnate Amidst Weak Demand and Weak Upstream Cost

Hamburg (Germany): The prices of German Tertiary Butyl Alcohol have remained stable for the past few weeks as the mounting pressure from fluctuating upstream crude oil prices has decreased. Over the May Day holiday period, there was a notable plunge in international crude oil prices. Between April 30th and May 3rd, Brent crude oil witnessed a drop of 5.95%, while WTI crude oil saw a decline of 6.85%, pushing oil prices to nearly two-month lows. The primary reason behind this decline is attributed to a significant increase in US inventory, along with expectations of a ceasefire in the Middle East, which have alleviated geopolitical tensions.

Inquiries for Tertiary Butyl Alcohol from the downstream solvents manufacturing industry have continued to remain poor. Additionally, domestic manufacturers of Tertiary Butyl Alcohol were operating at lower levels amid timid demand conditions in the domestic and other European nations. Overall, market transactions of Tertiary Butyl Alcohol were minimal, and sluggish trading activities were observed. In the first quarter, German exports declined by 1.1% year-on-year, totaling 402.2 billion euros. Despite a slight increase in March, exports to China rose by 3.7%, with China remaining Germany's largest supplier. This noted a potential recovery in exports but warned of remaining structural issues and ongoing trade protection.

In April 2024, flash Germany's manufacturing PMI increased slightly primarily due to a slightly improved performance in intermediate goods. However, new orders experienced a sharper decline, including those of chemicals, including Tertiary Butyl Alcohol. Encouragingly, new export orders fell at the slowest rate in a year. Speaking about the supply of chemicals such as Tertiary Butyl Alcohol, intense demand on the Asia-Europe trade route is utilizing all accessible ocean capacity originating from Asia. Space limitations have become another challenge confronting the market, alongside extended transit durations, escalating rate levels, and additional surcharges for voyages through the Red Sea, impacting the trade of chemicals, including Tertiary Butyl Alcohol. In general, the ocean container market has adapted to a new pattern that circumvents the Red Sea due to ongoing Houthi attacks, which persisted this week. Although considerable backlogs, congestion, and equipment shortages witnessed during the initial weeks of the crisis have alleviated, adjustments have led to some moderate yet persistent disruptions.

The demand outlook for Tertiary Butyl Alcohol appeared bleak due to reduced inquiries from the downstream solvents industry both domestically and internationally. Other European markets also experienced low consumption of Tertiary Butyl Alcohol as consumers maintained ample inventories. Market participants noted limited transactions for Tertiary Butyl Alcohol, with consumers primarily making purchases based on immediate needs. Germany's economy is expected to grow by 0.2% in 2024, below the global growth rate of 3.1%, according to the Organisation for Economic Co-operation and Development. These figures indicate that the economy is still under pressure, and sentiments have deteriorated further.