During the first half of June 2024, Mineral Turpentine Oil (MTO) prices in India faced downward pressure due to oversupply issues and challenging export conditions, despite a positive demand outlook from the paints and coatings industries. The production costs of MTO were influenced by a 7% decrease in crude oil prices, driven by a significant production increase of 100,000 barrels per day among nine OPEC members in May. This surge, led by Nigeria and Iraq, pushed the group 320,000 barrels per day above their collective production targets, resulting in a decline in global crude oil prices, even as Russia-led allies reduced their output. Nigeria's production rose by 50,000 barrels per day due to robust exports and supply to the Dangote refinery, despite ongoing challenges such as crude theft and underinvestment. Meanwhile, Iraq increased its production by 40,000 barrels per day to 4.28 million barrels per day, surpassing its target by 280,000 barrels per day, despite commitments to address overproduction.

In India, data from the Petroleum Planning and Analysis Cell indicated an excess supply of MTO. Petroleum product consumption, including MTO, saw a 1% decline year-on-year in May 2024, totalling 20.5 million metric tonnes. Production of petroleum products, including MTO, surged from 2.9 million metric tonnes in April 2024 to 5.7 million metric tonnes in May 2024, while consumption increased marginally from 1 million metric tonnes to 2.1 million metric tonnes during the same period, exacerbating the supply glut and contributing to price declines. Furthermore, overall exports of petroleum products decreased by 0.9% in May 2024, underscoring the prevailing supply glut.

Export conditions remained unfavourable with spot rates for shipping containers to the US and Europe from Asia exceeding $6,000 for 40-foot equivalent units. Global port congestion reached an 18-month high, causing delays in Asian ports like Qingdao, Guangzhou, Shanghai, Port Klang, and Singapore, further disrupting shipments to Europe and North America.

In North America, demand for MTO was primarily driven by residential construction, which saw a notable increase in housing project starts and overall construction activity. Conversely, in Europe, demand for MTO from paints and coatings industries remained sluggish amid a downturn in Eurozone construction activity, marked by declines in new orders and construction jobs.

Overall, while North America showed resilience in MTO demand driven by construction, oversupply issues in India and subdued European demand contributed to the bearish trend observed in MTO prices during the first half of June 2024.