High Crude Oil Value Pressures Solvents Market, C10 Solvent Prices Rise Globally

Recently, C10 Solvent prices have witnessed an incline across Europe and Asia by around 1% as prices of feedstock Crude Oil incline further by 9% in the month of September. With prime OPEC+ members such as Russia and Saudi Arabia voluntary extending production cuts by 1.43 million barrels by the end of 2023, prices are further expected to appreciate, despite the consumption rate of C10 Solvents being low due to underwhelming performance of the construction industry.

The performance of the construction industry across Europe was largely low across Europe with investment sentiments continuing to diminish. Increments in the prices of C10 Solvents were mostly attributed to escalating crude oil prices which increased production costs of C10 Solvent. Demand from the downstream paint and solvent industry remained persistently low as building permits declined by more than 30% in the first half of 2023 with depreciations of similar magnitude being expected in the latter half of 2023 on a year-on-year basis, with key reason being increasing construction costs and poor financial conditions which continued to plague the German economy.

Across Asia, particularly in South Korea, new house prices have been recorded to rise at a faster pace than the country’s growth rate, thereby increasing the demand for C10 Solvents for painting sector. Additionally, low interest rates and relaxed regulations have bolstered leading construction firms to invest in the residential sector of the country from where the demand for paint and solvents resurged. This further necessitated the requirement of C10 solvents in addition to the increments in the prices of C10 Solvents.

In Singapore, residential construction sector seems to be recovering as house prices increased marginally by 0.5%, however purchasing sentiments in the residential sector continue to be restrictive as uncertainty about rising interest rates continue to shrink the pool of new-home seekers. Despite the shrinkage in the residential market, the demand of major condominiums has compelled the requirement of paints which is expected to further strengthen the demand for C10 Solvents. Moreover, Resale volumes climbed around 3% sequentially in the third quarter which further necessitated the requirement of renovation and refurbishment which also led to a healthy demand for C10 Solvent.

Overall, prices of C10 Solvent are expected to rise in September 2023, as Crude Oil inventories continue to diminish as indicated by the depletion of 2.1 million barrels in the third week of September. Moreover, moderate demand is expected to originate from the automotive segment which may compel prices of the product to continue to witness a bullish market situation across the globe.