The Isopentane markets in North America and Europe faced a bearish trend in October 2024, with prices experiencing a noticeable decline due to oversupply and minimal disruptions from the hurricane season. In Europe, the return of refineries from summer maintenance between August and mid-September further eased supply constraints, leading to a more stable market. However, demand for Isopentane from downstream sectors, particularly the Expanded Polystyrene (EPS) industry, remained weak. Key terminal industries such as automotive and construction continued to underperform, with only marginal improvements seen in the US market.

Despite a slight uptick in crude oil prices, rising by approximately 3% during October 2024, Isopentane prices remained under pressure. Suppliers across both regions, facing a lack of significant new orders from the EPS sector, focused on clearing out existing inventories. With the end of the financial year approaching, market participants were primarily engaged in destocking, contributing to a weak market outlook for Isopentane.

Improved refinery utilization rates in the US helped maintain healthy Isopentane inventories. According to the Energy Information Administration (EIA), weekly refinery utilization rose from 86.7% during the week ending October 4 to 89.1% by October 25. Despite this, export conditions were less favorable due to the continued effects of the ILA strike on the US East Coast, which caused delays and capacity losses at key ports, impacting the flow of Isopentane exports.

In the downstream markets, the US automotive sector saw a modest increase in vehicle sales, rising 1.7% month-on-month in October to an annualized rate of 16.0 million units. However, this did not translate into higher demand for Isopentane, as higher financing costs continued to weigh on the sector. Similarly, in the construction industry, US spending saw a slight increase of 0.1% in September, but demand for Isopentane from EPS producers remained subdued. These factors contributed to a wait-and-see sentiment in the Isopentane market.

In Europe, Isopentane suppliers were further burdened by challenges within the automotive sector, which saw a 5.5% year-on-year decline in car registrations in October, exacerbating already weak demand for Isopentane. The sluggish performance in automotive and construction sectors across Europe contributed to a broader downturn in Isopentane consumption. By the end of October, Isopentane prices had fallen by approximately 5%, driven by low orders and relatively stable supply conditions.

Moreover, logistical issues continued to complicate the flow of Isopentane and other products in Europe, particularly at key North European ports. The ongoing modernization program at Hamburg's HHLA Altenwerder and Burchardkai terminals has created significant bottlenecks. The port operator has been forced to implement controls on export containers out of Altenwerder, further disrupting exports of Isopentane and other goods.

In addition, the approach of winter weather has exacerbated port congestion. Maersk reported that heavy fog in Rotterdam has led to delays, lengthening vessel queues. Similarly, in Antwerp, high vessel waiting times persist due to late arrivals from previous ports, hindering the timely shipment of Isopentane. Maintenance work on the Belgian port’s quays is also expected to continue until mid-December, further contributing to yard congestion and slowing down the overall clearance of export containers.

Looking ahead, there are expectations that Isopentane prices in both North America and Europe may see a modest rebound by the end of November 2024. With October’s prices at historically low levels, manufacturers are expected to revise prices upward, particularly in response to anticipated restocking ahead of the festive season. Additionally, rising crude oil prices are likely to drive up production costs for Isopentane, further supporting price increases.