In a surprising turn of events, the European Iso-butanol market witnessed a decent revival in November 2023, driven by potential factors. The primary catalyst was the substantial increase in offered quotations from Oxo-alcohol producers, OQ Chemicals, a global leader for Oxo intermediate. This surge in price was correlated with the prolonged cost pressure in response to the steep rise in costs of raw materials, particularly propylene. However, November witnessed a global wave of Oxo-intermediate price increases, impacting not just Europe, but also the USA and the rest of the world (ROW). Effective from November 1st, 2023, offered quotations for 2-EH jumped by around +100 USD/mt, and for n-butanol and Iso-butanol by +80 USD/mt in Europe, indicating a near-uniform surge across continents.

After experiencing a lull in market sentiments of Europe, the prices of Iso-butanol have taken an upswing in November 2023 amidst the announcement of OQ Chemicals. The soaring price of propylene, the key feedstock for Iso-butanol production, and healthy demand from the downstream automotive industry exerted upward pressure on producers' costs worldwide, prompting them to adjust their pricing strategies across all markets. The near-identical price hikes in the USA and ROW compared to Europe suggest a high degree of interconnectedness in the global Iso-butanol market.

On the demand side, the downstream automotive industry in Europe was a glimmering ray of hope. As per the data, the latest figures from the Kraftfahrt-Bundesamt shows a significant rise in overall automotive sales, which also confirms that 64.9% of all new car registrations were commercial in November in Europe. As a ripple effect, the direct correlation between these two resulted in a surge in demand for Iso-butanol. Moreover, the Western Europe PV market maintained its upward trajectory in November, with the selling rate edging up to 12.6 million units/year from 12.1 million units/year in October. Overall vehicle registrations in November also saw a year-over-year (YoY) increase of 5.3%, reaching 968k units. On the upstream front, Propylene, the key raw material of Iso-butanol production, has been on highs for months. Faced with these cost pressures, producers had no choice but to raise their prices. Moreover, manufacturers faced with adversity, demonstrated their ability to navigate challenging market conditions and adjust their strategies to ensure profitability.

As per ChemAnalyst, the increase in Iso-butanol is foreseen to be limited till November 2023. December may bring a descent trend as several producers expect to clear inventories to avoid tax repercussions which may lead the prices to fall.