Global n-Butanol Market Exhibits Mixed Trends in Early November 2024

During the first half of November 2024, the global n-Butanol market experienced diverse conditions, with prices remaining stable across North America, where historically low prices persisted, while the Asian market showed signs of recovery, and the European market continued its bearish trend.

Demand for n-Butanol from downstream industries, particularly paints and coatings, remained largely low across Europe. In contrast, North America saw a slight recovery in demand. However, the situation in Asia was more favourable, with healthy improvements driven by the stimulus package announced by Chinese authorities, alongside price revisions made by manufacturers in China.

Despite this, the global n-Butanol market continued to face pressure, especially with the recent addition of approximately 1 million tonnes per year of oxo-alcohols capacity, which came online in China in late 2024. This additional capacity of n-Butanol across China contributed to continued price pressure in the U.S. and German markets.

In the U.S. market, price stability of n-Butanol was observed, attributed to modest improvements in the construction and automotive sectors, which led to some consumption from the downstream paints and coatings and plasticizer industries. According to the U.S. Department of Commerce, single-family housing starts rose by 2.7% to a seasonally adjusted annual rate of 1.027 million units in October 2024. Additionally, U.S. construction spending increased slightly by 0.1% in September 2024, reaching a seasonally adjusted annual rate of $2.14 trillion. However, export conditions remained unfavorable due to congestion caused by the aftermath of the ILA strike, which led to capacity losses at U.S. East Coast ports.

In Germany, demand for n-Butanol remained subdued, particularly from the paints and coatings industries, promoting prices to depreciate by approximately 1% during the first half of November 2024. The construction sector also showed weak demand. From January to September 2024, building permits for new homes in Germany dropped by 19.3%, or 33,900 units, compared to the same period in 2023. This marked one of the steepest declines in recent years, raising concerns about the future of the housing market. However, the automotive industry in Germany showed a slight improvement, with new car sales rising by 6% in October 2024, according to data from the Federal Motor Transport Authority (KBA). This helped support the n-Butanol market in Europe.

In contrast, the Asian market saw an upward trajectory in n-Butanol prices, fuelled by price revisions and low supply conditions prompting prices to rise by approximately 6% during the first half of November 2024. Major players in China, including Sinopec, announced price hikes of Yuan 300/MT in early November 2024. Furthermore, supply of n-Butanol remained tight as major oxo-alcohol producers, such as Formosa Plastics and Hanwha Solutions, were reported to have their plants in Taiwan and South Korea undergoing maintenance turnarounds, leading to reduced supply in China.

The announcement of economic stimulus packages by Chinese authorities boosted market sentiment, leading to increased orders for immediate procurement and further supporting the recovery of the n-Butanol market.

Looking ahead, it is expected that prices of n-Butanol will see some improvements in the U.S., European, and Chinese markets. Sentiment in these regions is likely to remain somewhat improved due to the upcoming festive holidays, which typically prompt increased transaction activity in downstream industries like paints and coatings and plasticizers. Additionally, low supplies of n-Butanol in the U.S. and European markets are anticipated as businesses prepare for the holidays, leading to reduced operations.