Global Tetrahydrofuran Market Descends With Upstream Prices

The market of Tetrahydrofuran witnessed a declining behavior across the globe as the feedstock governed the prices of the product. Tetrahydrofuran is manufactured by dehydrogenating Butanediol with the presence of a catalyst. The feedstock (Butanediol) prices decreased proportionally, impacting the Tetrahydrofuran market as the production cost declined. The demand for Tetrahydrofuran in the global market reduced as the coating and solvents industries, including Spandex manufacturing units, showcased a slow interest in the product until December 2022.

Market participants expected an incline in the prices of Tetrahydrofuran with the upcoming festive season but witnessed the opposite trend. It has been more than ten months since the region saw an energy crisis and a rising inflation rate. End-use manufacturing units' demand also declined as small-scale industries halted their operational rate. Europe imports the feedstock (Butanediol) from China, and the demand-supply gap between these countries for THF could not be bridged easily in the last few months. Towards the end of the Q4 of 2022, the prices of Tetrahydrofuran ranged between USD 3340 to 3570 FOB Hamburg (Germany).

In China, the price trend of Tetrahydrofuran followed the southward momentum as the country witnessed shrinkage in trading terms within the domestic and international markets. According to the data published by government officials, the import-export quantity from China diminished by approximately 8%. Rushing inflation, higher interest rates, and depreciating local currency governed the prices of Tetrahydrofuran in the Asia-Pacific region. Manufacturing units were pressured to shut down temporarily due to maintenance and a lack of human resources. Recently, the government has rolled out lockdown curbs in cities of China such as Beijing and Zhengzhou as the infection cases declined. As per ChemAnayst, the market prices of Tetrahydrofuran may continue to follow the declining trend in the global market as the demand for the product is slow, and the feedstock prices may still plunge further.